Shafaq News
Oil prices inched lower on Wednesday, extending theprevious session's declines as investors assessed the U.S.-Iran peace deal,though uncertainty over the full resumption of shipping through the Strait ofHormuz limited further falls.
Brent crude futures dipped 16 cents, or 0.2%, to $78.80a barrel by 0340 GMT, while U.S. West Texas Intermediate fell 25 cents, or0.3%, to $75.80 a barrel.
Both benchmarks fell about 5% for a second straightsession on Tuesday to stand at three-month lows, on hopes that a U.S.-Iran dealwould allow oil flows through the Strait.
"Markets are broadly stripping out the embeddedgeopolitical risk premium in oil prices," said Priyanka Sachdeva, seniormarket analyst at Phillip Nova.
"That said, the path toward normalisation remainsfar from straightforward. While political agreements may be progressing,physical tanker traffic through the Strait has yet to fully recover."
The deal would provide for the United States to lift itsblockade of Iran's ports, while Tehran would allow oil tanker traffic throughthe Strait, effectively blocked since U.S. and Israel strikes on February 28.
"Oil markets retreated on expectations the Straitof Hormuz would reopen following the peace agreement, but traders held offfurther selling pending details," said Hiroyuki Kikukawa, chief strategistof Nissan Securities Investment.
Before the closure, about a fifth of global crude oiland liquefied natural gas supplies flowed through the Strait.
Details of the interim peace deal began to emerge on Tuesday,with President Donald Trump saying it would rule out a nuclear weapon forTehran and a U.S. official saying it would allow Iran to sell oil upon signing.
The memorandum of understanding, not yet public, extendsby another 60 days a tenuous ceasefire agreed in April, so as to allow room fortalks toward a permanent truce.
Still, industry officials say a full return to pre-warproduction and refining levels is likely to take weeks, months or even years.
Israel has distanced itself from both the Aprilceasefire and the latest U.S.-Iran pact, fuelling uncertainty about whether itwill hold.
Israeli drone strikes targeted three vehicles insouthern Lebanon on Tuesday, killing at least four and wounding others,Lebanon's National News Agency said, prompting a rare public rebuke from Trump.
China's crude oil throughput fell 9.1% in May on theyear to its lowest in almost four years, data showed, also signalling thatrefiners were starting to draw on stockpiles amid the Iran war.
The American Petroleum Institute report showed U.S.crude stocks fell 8.3 million barrels in the week ended June 12, the sourcessaid.
It exceeded expectations for a draw of 4.6 millionbarrels, with official numbers due from the Energy Information Administrationat 10:30 a.m. ET (1430 GMT) on Wednesday.
(Reuters)
Only the headline is edited by Shafaq News Agency.
