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US Oil Update: Oil Futures Extend Decline as Supply Concerns Ease

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Global crude benchmarks extended their decline on Thursday dropping more than 1% as progress in US-Iran peace talks and recovering Middle East crude flows eased supply anxieties.

Front-month West Texas Intermediate crude futures fell 1.3% to $67.71 per barrel, while Brent futures dropped 1.2% to $70.72/bbl.

"Crude oil extended recent losses on further signs of oversupply in the market amid easing tensions in the Middle East," ANZ analysts said.

A spokesperson for Qatar's Foreign Ministry posted on social media platform X that indirect US-Iran talks have yielded positive advancements toward finalized details of the June peace agreement.

Adding to the physical availability of crude, the UAE successfully restored its export volumes near pre-war levels throughout June.

Bloomberg reported that the nation utilized a dedicated bypass pipeline to circumvent the Strait of Hormuz altogether, while additionally routing multiple tankers via dark voyages with their automated transponders deactivated.

The crude oil market has yet to fully stabilize following the US-Iran deal, but a Brent price of $72 to $75 per barrel appears to be the new range, Brazil's state-run Petrobras chief executive Magda Chambriard told Reuters.

On the supply side, US commercial crude oil inventories decreased by 3.8 million barrels to 408.4 mmbbls in the week ended June 26, the Energy Information Administration said in its weekly report on Wednesday.

Looking ahead, the market faces further structural downward pressure from upcoming policy shifts.

OPEC+ nations are widely anticipated to increase their collective oil production targets beginning in August, Reuters reported.

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