A downward trend has been recorded in oil prices in recent days, following progress made in negotiations between the US and Iran. More specifically, the price of Brent crude oil fell to $72 per barrel during Thursday’s (06/25) trading session, extending losses for the fourth consecutive session and wiping out all gains recorded since the outbreak of the war in Iran.
Read: Oil prices fall following progress in US-Iran talks — Brent drops to $76, WTI near $72
Also notable is that WTI crude oil has slipped below $70 per barrel, as the agreement between the US and Iran has encouraged more tankers to pass through the Strait of Hormuz.
Significant drop in oil prices
Supply has also increased across key market segments, with buyers facing a surge in crude oil supply from the Middle East and other exporting regions, including West Africa.
In addition, a temporary US decision allowing purchases of already-loaded Iranian oil is expected to further boost available supply. Reflecting the prevailing market sentiment, the Brent prompt spread — a closely watched indicator — shifted into bearish contango on Wednesday (06/24) for the first time since the conflict began. August Brent contracts are trading at a discount compared to September contracts (priced at $73.34 versus $73.59 respectively), signaling a easing of immediate supply concerns and an improvement in short-term crude oil availability.
