Oil prices fall for third day in a row amid opening of Hormuz

Two tankers carrying nearly 2 million barrels of oil passed through the Strait of Hormuz on Monday, weighing on prices as the gradual resumption of transits weighs.

Oil prices fell on Tuesday, extending their decline as investors await clearer signs of a resumption of crude flows through the Strait of Hormuz following peace talks between the United States and Iran, Reuters reported.

Brent crude futures fell 20 cents, or 0.3 percent, to $77.70 a barrel, while WTI crude fell 12 cents, or 0.2 percent, to $73.74. Prices fell more than 3 percent on Monday after the United States granted Iran a 60-day waiver on sanctions and amid reports of a cessation of hostilities in Lebanon as part of a broader deal.

“The gradual increase in oil flows through the Strait of Hormuz continues to weigh on the market,” ING analysts said in a note.

Two tankers carrying nearly 2 million barrels of oil passed through the strait on Monday, according to ship tracking data, suggesting a pick-up in traffic after a slump over the weekend.

“Transit volumes appear to have picked up sharply in recent days, which the market will take as an indication of both physical oil and possibly futures oil arrivals, as well as progress in diplomatic talks,” said Neil Crosby, head of research at Sparta Commodities.

The market is also under pressure from the United States: government data showed on Monday that crude stocks in the Strategic Petroleum Reserve fell to 331.2 million barrels, the lowest level since June 1983. The decline followed the conflict between the United States and Iran.

“There is still a certain amount of skepticism in the market, based on deep-rooted distrust between Washington and Tehran, which suggests that any return to pre-war oil prices is likely to be delayed rather than immediate,” said Tim Waterer, chief market analyst at KCM Trade.

The day before, USM reported that more than 400 ships were stranded in the Strait of Hormuz.