Crude oil prices fall nearly 2% on easing supply concerns
What's the story
Crude oil prices witnessed a nearly 2% decline on Friday, heading for a sharp weekly loss. The drop is mainly due to easing concerns over supply disruptions, with more stranded oil tankers resuming movement through the Strait of Hormuz. Brent crude futures fell by $1.47 or 1.95%, to $73.79 per barrel at 4:21am GMT while US West Texas Intermediate (WTI) crude dropped by $1.44 or 2%, to $70.48 a barrel.
Market impact
Hopes for US-Iran deal lower oil market
The fall in crude oil prices is largely due to rising hopes of a potential deal between Washington and Tehran. Such an agreement could pave the way for more Iranian crude exports, thereby reducing risks to oil shipments through the Strait of Hormuz, a vital artery for global crude trade.
Supply stability
Increased tanker traffic through Strait of Hormuz
The prospect of a lasting peace deal has also resulted in higher tanker traffic through the Strait of Hormuz. Meanwhile, crude exports from the Middle East and West Africa have increased, further easing fears of potential supply disruptions. Investors are closely monitoring developments in US-Iran negotiations and crude flows through this key waterway for further direction on oil prices.
Operational resumption
Saudi Aramco resumes oil loading at Ras Tanura terminal
In a major development, Saudi Aramco has resumed oil loading at its Ras Tanura terminal in the Gulf after nearly four months of suspension. "There is a general selloff as the market reacts to the increased flows exiting the Strait of Hormuz and China not yet picking up crude demand," June Goh, senior oil market analyst at Sparta Commodities told Reuters.