Oil prices extend losses on Wednesday

Brent crude futures fell 0.4 per cent to $79.04 a barrel, while US West Texas Intermediate (WTI) crude declined 0.8 per cent to $75.19 a barrel by 0630 GMT, after both benchmarks dropped more than 5 per cent in the previous session.

Prices came under pressure after Qatar said mediators were making progress towards ending the conflict, although Tehran denied US President Donald Trump’s claim that talks were underway. Brent crude closed below $80 a barrel on Tuesday for the first time since July 13.

Analysts warned that despite the easing geopolitical risk premium, oil markets remain vulnerable to supply shocks if diplomatic efforts fail. Before the conflict, around 20 per cent of global oil and liquefied natural gas shipments passed through the Strait of Hormuz.

Meanwhile, industry data from the American Petroleum Institute showed US crude inventories rose by about 2.7 million barrels in the week ended July 31, adding to downward pressure on prices ahead of official government data due later on Wednesday.

Attribution: Reuters