Oil prices fell 1% at settlement on Wednesday to their lowest levels since March, as optimism over talks between the United States and Iran eased supply concerns, after US President Donald Trump said meetings between the two countries held in Qatar had gone well.
Brent crude futures fell $1.38, or 1.89%, to settle at $71.57 a barrel. US West Texas Intermediate crude futures declined 92 cents, or 1.32%, to $68.58 a barrel. Both benchmarks recorded their lowest levels in more than four months.
"The negotiations currently under way in Qatar are being seen as positive, which has allowed prices to fall further... and there is a possibility we could see prices go even lower," said Ole Hansen, analyst at Saxo Bank.
Trump said on Wednesday that things between the United States and Iran are going well, adding that the latest meetings in Qatar went well. A source familiar with the talks and an Iranian official said the United States and Iran held technical talks in Doha on Wednesday regarding navigation through the Strait of Hormuz and reaching a permanent ceasefire. The United States and Iran have been publicly exchanging recriminations over the interpretation of the interim agreement, and the two sides exchanged military strikes earlier in the week.
Tanker transit through the strait has begun to recover, with US Vice President JD Vance saying oil flows through the strait had returned to pre-war levels without citing specific figures. The US Energy Information Administration said on Wednesday that US crude oil inventories fell by 3.8 million barrels to 408.4 million barrels in the week ending June 26, the lowest level since September 2018, as domestic demand from refineries rose ahead of the July 4 holiday. However, the decline was less than the 4.5 million barrel drop analysts had expected in a Reuters poll.
A Reuters poll published on Tuesday showed that analysts cut their oil price forecasts for 2026 for the first time since the war on Iran began, following five consecutive monthly increases, as the reopening of the Strait of Hormuz eased fears of prolonged supply disruptions.
Brent crude plunged about $45 a barrel in the second quarter of this year, its largest quarterly loss since the global financial crisis in 2008. At the same time, US crude futures fell by about $31, their largest quarterly loss since 2020, when the Covid-19 pandemic caused a collapse in global crude demand. These declines came in the wake of progress toward ending the war in the Middle East, which reversed the sharp gains caused by the earlier hostilities.
Three sources said on Wednesday that the OPEC+ alliance of oil-producing countries is likely to agree on a new increase in production targets for August at its scheduled meeting on Sunday.