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Update: WTI Oil Edges Down Even as Iran Conflict Keeps Strait of Hormuz Shut

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(Updates prices in the second paragraph.)

West Texas Intermediate (WTI) closed lower for the first time in four sessions on Thursday, even as escalating violence between the US and Iran is keeping the Strait of Hormuz closed.

WTI crude oil for August delivery closed down 0.8% to settle at $78.95 per barrel, falling off the highest since June 15, while September Brent oil was last seen down 0.8% to $84.72.

US forces continued to strike Iran as they seek to eliminate the country's ability to threaten vessels passing through the Strait of Hormuz, a key chokepoint that carried about 20% of global oil supplies before the war began on Feb. 28.

The Guardian reported the US launched strikes on the port city of Bandar Abbas as well as targets near Tehran and a tanker ignoring the US blockade of Iranian ports, while Iran responded with attacks on Bahrain, Kuwait and Jordan.

The fresh fighting is keeping ships trapped in the Persian Gulf, leaving Asian nations struggling for supply. Just 10 ships moved through the Strait of Hormuz in the past day, according to hormuzstraitmonitor.com, 17% of normal traffic through the waterway.

"Crude oil steadied after a three-day rally, with Brent trading around USD 85, suggesting the recent wave of short covering that helped fuel the advance may have largely run its course for now. Nevertheless, escalating Middle East tensions continue to raise concerns about energy flows from the region, prompting the IEA to warn that a prolonged disruption could have a meaningful impact on the global economy," Saxo Bank wrote.

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