Oil prices fell for a third consecutive day on Thursday as concerns over supply disruptions eased after Qatar said Iran and the U.S. had made progress in talks over the Strait of Hormuz.
Brent futures LCOc1 were 66 cents or 0.92% lower at $70.91 a barrel at 0758 GMT, while U.S. West Texas Intermediate crude CLc1 fell 59 cents or 0.86% to $67.99 a barrel, their lowest level since February 27.
The talks made "positive progress" on matters related to the memorandum that halted the war in June, a Qatar Foreign Ministry spokesperson said in a post on X, though there was no sign the two sides made headway towards a lasting peace.
"Recovering oil flows through the Strait continue to weigh on prices, driven by previously stranded tankers exiting the Gulf. This additional supply is a headwind for oil for now," said UBS analyst Giovanni Staunovo.
The next meeting between Iran and U.S. negotiators will take place after July 9 funeral processions for Iran's late Supreme Leader Ayatollah Ali Khamenei, the Qatar ministry added.
Iran is determined to win international recognition of its control over the strait and its ability to levy fees on ships entering or leaving the Gulf even if it has to do so by force, two senior Iranian sources said.
UBS cut its Brent forecasts citing the U.S.-Iran pact and the subsequent increase in oil shipping through the strait.
The bank lowered its Brent crude price forecasts, cutting its third quarter estimate by $25 per barrel to $80, reducing its forecast for the fourth quarter of 2026 by $10 per barrel to $80, and trimming its 2027 outlook by $10 per barrel to $75.
Analysts at HSBC expect the market "to absorb returning Middle East barrels through gradual restocking, alongside the end of IEA strategic stock releases in July".
"As the near-term "mini-glut" fades, Brent could move back towards $80/b or higher," the HSBC note said.
Meanwhile, OPEC+ oil-producing countries are likely to agree to a further hike in their output targets from August when they meet on Sunday, sources said on Wednesday.
Elsewhere, Ukrainian forces struck the Lukoil-Nizhegorodnefteorgsintez oil refinery in Russia's Nizhny Novgorod region, Ukraine's General Staff said on Thursday.
(Reuters - Reporting by Anushree Mukherjee in Bengaluru, Sam Li and Lewis Jackson in Beijing, Sudarshan Varadhan in Singapore; Editing by Sonali Paul, Edwina Gibbs and Alexander Smith)
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