Oil prices edged higher on Thursday as buyers moved to secure supply ahead of the long US Independence Day weekend. WTI settled at $68.69 a barrel and Brent at $71.80, while easing tensions around the Strait of Hormuz pushed UBS to cut its Brent forecasts.
Crude prices rose modestly on Thursday as traders locked in barrels before the Independence Day holiday in the United States, the world's largest oil producer. WTI settled at $68.69 a barrel, up 11 cents or 0.16%. Brent finished at $71.80, up 23 cents or 0.32%.
Hormuz shipping recovers
Behind the muted move sits a gradual easing of the supply fears that gripped the market during the four-month war that disrupted shipping through the Strait of Hormuz. Tanker traffic has recovered from the near standstill seen at the height of the conflict, though it stays well below pre-war levels. According to AP, 258 vessels crossed the strait last week, up from 138 the previous week, with this week settling into roughly 30 to 60 crossings a day against the roughly 130 daily transits seen before the war.
Saudi giant Aramco, the world's single largest crude oil exporter, has already shipped at least five supertankers from Ras Tanura through the strait.
Peace talks and Iran's warning
On the diplomatic front, Qatar, which is mediating between the US and Iran, said the talks made "positive progress" on matters tied to the memorandum that halted the war in June, though there was no sign the sides moved toward a lasting peace. The next meeting between Iran and US negotiators will take place after the July 9 funeral processions for Iran's late Supreme Leader Ayatollah Ali Khamenei.
Yet the risk has not vanished. Iran's joint military command warned on Thursday that all oil tankers transiting the Strait of Hormuz must follow Iran-approved routes or face an immediate and forceful response, adding that any US interference in the waterway would prompt a rapid and decisive reaction.
UBS trims Brent outlook
As shipping through the strait picked up, UBS cut its Brent forecasts, noting the waterway carries 20% of the world's oil. The bank lowered its third-quarter estimate by $25 per barrel to $80, reduced its fourth-quarter forecast by $10 per barrel to $80, and trimmed its 2027 outlook by $10 per barrel to $75.
Traders looking to trade oil now weigh recovering Hormuz supply against a still-fragile truce.
Source: Business Post Nigeria
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