Crude oil prices hovered near their lowest level since Mid-July hit in the previous day pressured by mounting optimism over a transit arrangement for the Strait of Hormuz which eased global supply concerns on Wednesday.
Brent crude futures eased 0.4% to $79.06 per barrel, while Murban crude futures rose 1.6% to $78.07/bbl.
"Brent fell 5.3% Tuesday to settle around $79 a barrel, its lowest since 10 July, as Hormuz deal optimism intensified," Saxo Bank analysts said.
They further added that Brent "extended losses overnight to about $78.75 after Axios reported Washington, Tehran and Oman were nearing an agreement to reopen the strait, with a Wednesday announcement targeted."
Reports indicate that Iran and Oman have progressed discussions on a framework where ships would enter the Persian Gulf via an Iranian-controlled route and exit through an Omani-controlled route, potentially tied to the lifting of US blockades on Iranian ports.
Meanwhile, US Treasury Secretary Scott Bessent noted that a deal could materialize imminently, with some vessels already transiting the vital waterway.
On the supply side, data from the American Petroleum Institute showed a 2.69-million-barrel increase in US crude inventories for the week ended July 31 which also kept prices in check.
The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.