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Update: WTI Oil Falls as US, Iran Sign Preliminary Peace Deal

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(Updates benchmark oil prices in the second paragraph.)

West Texas Intermediate (WTI) crude closed lower Thursday after Iran and the US signed a preliminary ceasefire deal that promises to reopen the Strait of Hormuz, freeing supply from Iran and the Persian Gulf nations that has been blocked since the war started on Feb. 28.

WTI crude oil for July delivery closed down less than 0.1% to settle at US$76.60 per barrel, rising off session lows of US$73.58, while August Brent oil was up by less than 0.1% to US$79.27.

The US and Iran last weekend reached a deal to end the war that has blocked the strait, a narrow waterway through which 25% of the world's seaborne oil passes, since the end of February.

The two countries on Wednesday signed a 14-point memorandum of understanding, which starts a 60-day negotiation period in which negotiators hope to hammer out a permanent agreement.

"Attention has now shifted to the pace at which traffic through the Strait of Hormuz can recover. An estimated 100 million barrels of crude and refined products are already loaded on tankers and waiting to leave the Gulf, while regional producers are taking steps to restart shut-in production," Saxo Bank said.

The Energy Information Administration on Wednesday said US oil stocks fell by 8.3 million barrels last week, the eighth-straight weekly drop.

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