Oil prices moved slightly lower while markets tracked US-Iran negotiation developments. Expectations of a resolution could pressure prices, but the physical market stayed tight. Tanker movements through the Strait of Hormuz occurred in isolated cases, while shipping activity remained severely restricted and the corridor operated far below normal levels. Supply conditions therefore remained difficult and continued to support prices despite improving diplomatic sentiment. Recent declines in US inventories reinforced the view that underlying balances were still constrained. Future diplomatic progress could weigh on prices near term, but persistent logistical disruptions and fragile supply conditions limited downside risk, while renewed tensions could quickly push prices higher.
"Oil prices moved slightly lower on Thursday as markets continued to monitor developments surrounding the negotiations between the United States and Iran. While hopes of a resolution could push prices down, the physical market remains tight. Although isolated tanker movements have taken place through the Strait of Hormuz, shipping activity remains severely restricted, leaving one of the world's most important energy corridors operating far below normal levels."
"As a result, supply conditions remain difficult and continue to support prices despite improving sentiment around the diplomatic process. Recent declines in US inventories also reinforce the perception that underlying balances remain constrained. Looking ahead, any clear diplomatic progress could continue to weigh on oil prices in the near term."
"However, persistent logistical disruptions and fragile supply conditions suggest that downside risks for prices may remain limited as normalisation could take time, while renewed tensions could quickly restore upward momentum."
Read at London Business News | Londonlovesbusiness.com
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