Oil prices fell sharply on Wednesday as easing fears of Gulf military conflict and talk of an Iran-Oman deal over the Strait of Hormuz pulled crude lower. Brent crude dropped 2.5% to $86.38 a barrel, while U.S. WTI crude declined 2.2% to $80.52 a barrel.
Brent crude futures fell 2.5% to $86.38 a barrel, the international benchmark. U.S. West Texas Intermediate crude oil dropped 2.2% to $80.52 a barrel. The declines came as traders weighed easing concerns about military conflict in the Gulf.
According to Dan Coatsworth, head of markets at AJ Bell: "U.S. sanctions on Iran were less severe than anticipated", adding that the lower oil prices helped markets regain some poise as government bond yields eased back from recent highs.
However, Paolo Broccardo, chief executive officer of BankPro, said the shift away from military action reduced the perceived risk to Gulf supply, even though the U.S. did not rule out other interventions. Pakistan reported progress in talks aimed at de-escalation and restoring navigation through the Strait of Hormuz, Broccardo noted.
Iran and Oman were meanwhile discussing a joint temporary shipping route through the Strait of Hormuz and a mine-clearing mission, seen as a precursor to a permanent arrangement to administer the waterway. Oman's foreign minister said in a social media post that future management of the Strait and a permanent solution will follow in due course, adding that discussions with regional partners will support peace, cooperation, stability and freedom of navigation.
Source: CNBC
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