Oil Continues to Decline as Brent Futures Hit $86.7

Oil prices fell by more than a dollar, continuing a downward trend that has persisted for days, amid expectations that upcoming talks between Iran and Qatar could lead to the reopening of the strategic Strait of Hormuz and reduce supply disruptions stemming from the Middle East war.

Since Iran effectively closed the strait due to the conflict, vessel-tracking data shows that flows have dropped to about a quarter of their pre-war levels.

Daniel Hynes, chief commodities strategist at ANZ Bank, said in a note: “Crude oil prices have dipped slightly as the likelihood of reopening the Strait of Hormuz improves amid ongoing talks,” but he warned that “concerns about a supply shortage in the oil market remain.”

The U.S. Energy Information Administration reported that distillate inventories, including diesel and heating oil, fell by 2.2 million barrels in the week ending August 21 to 103.4 million barrels.