Oil prices fall on Thursday

Oil prices extended losses on Thursday, with Brent crude and US West Texas Intermediate (WTI) falling to their lowest levels since late February as expectations of rising Middle East supply outweighed demand concerns.

Brent crude futures for August delivery fell $1.06, or 1.44 per cent, to $72.68 a barrel by 0639 GMT, while WTI crude declined 76 cents, or 1.08 per cent, to $69.58 a barrel.

The decline came after both benchmarks dropped by nearly $3 on Wednesday as concerns over disruptions to oil flows through the Strait of Hormuz eased.

Market analysts said prices reflected expectations of a faster-than-anticipated return of Middle Eastern oil supplies, with prompt Brent futures trading below September contracts, signalling ample short-term supply.

US Energy Secretary Chris Wright said oil flows through the Strait of Hormuz had nearly returned to pre-conflict levels, with at least 20 million barrels transported through the waterway over the past 24 hours. He added that full normalisation could take several weeks as demining operations continue.

Oil prices also came under pressure from expectations that Iran could increase exports following a temporary easing of US sanctions and the resumption of tanker traffic through the strait after a preliminary agreement to end the US-Israeli conflict with Iran.

Meanwhile, Oman opened temporary shipping routes on Wednesday to facilitate tanker movements through the Strait of Hormuz in coordination with the International Maritime Organisation.

Attribution: Reuters