Crude oil futures traded lower on Thursday morning after the US and Iran concluded their indirect talks in Qatar without reaching an agreement, according to a report by The Hindu BusinessLine.
Price Movements
At 10.02 am on Thursday, September Brent oil futures on the ICE were at $70.83, down by 1.03%, and August crude oil futures on the NYMEX (WTI) were at $67.84, down by 1.08%. On the Multi Commodity Exchange (MCX) in India, July crude oil futures traded at ₹6,469 against the previous close of ₹6,525, down by 0.86%, and August futures traded at ₹6,498 against ₹6,552, down by 0.82%.
Geopolitical Drivers
Quoting unnamed sources, a Reuters report noted that negotiators for the two countries spent two days in Doha discussing maritime traffic in the Strait of Hormuz and unfreezing Iran’s funds. There was no sign they had made headway toward a lasting peace. Qatar’s Foreign Ministry said the next meeting will take place after funeral processions for Iran’s late Supreme Leader Ayatollah Ali Khamenei, who is due to be buried on July 9.
Supply and Demand Fundamentals
The petroleum status report released by the US Energy Information Administration (EIA) for the week ending June 26 showed a decline in crude oil inventories. According to the EIA, US commercial crude oil inventories decreased by 3.8 million barrels from the previous week. At 408.4 million barrels, US crude oil inventories were about 7% below the five-year average for this time of year.
| Product | Weekly Change (million barrels) | vs. 5-Year Average |
|---|---|---|
| Crude oil | -3.8 | -7% |
| Motor gasoline | -2.3 | -7% |
| Distillate fuel | +2.5 | -8% |
Total products supplied in the US over the last four-week period averaged 20.6 million barrels per day, up by 1.7% from the same period last year. Motor gasoline product supplied averaged 9 million bpd, down by 2.6% YoY. Distillate fuel product supplied averaged 3.7 million bpd, down by 1.9% YoY. Jet fuel product supplied was up 0.6% compared with the same period last year.
Other Commodity Markets
July natural gas futures were trading at ₹304.90 on MCX against the previous close of ₹306.80, down by 0.62%. On the National Commodities and Derivatives Exchange (NCDEX), September Mumbai Raindall contracts were trading at ₹2,250 against the previous close of ₹2,228, up by 0.99%. July cottonseed oilcake futures were trading at ₹3,663 against the previous close of ₹3,674, down by 0.30%.
For traders, the failure of US-Iran talks to produce a deal removes near-term downside risk from a potential easing of sanctions, while the sharp draw in US inventories reinforces a tightening supply picture. The next meeting after Khamenei's burial on July 9 could provide further clues on the trajectory of Iranian oil exports.
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