CRUDE REMAINS LOW
Brent crude is trading close to $79 per barrel, while West Texas Intermediate hovered around $75 after experiencing an 11% drop during the first three trading sessions of the week. A joint statement from both nations is currently under review, indicating that the route would remain operational for a duration of two to four months; however, Iranian officials clarified that this agreement does not signify a complete reopening.
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As per a Bloomberg report, crude prices have fallen amid optimism that a potential agreement to restore traffic through the waterway is imminent, with Trump reiterating that a deal is on the horizon. The report pointed out that uncertainties persist, and traders have been hesitant to fully liquidate long positions, cautious of being caught off guard by a sudden escalation.
In a demonstration of ongoing risks to shipping in the Middle East, the UK Navy reported that a tanker detected two explosions while navigating the strait near Kumzar, Oman.
Previously, Iran-aligned Houthi militants in Yemen claimed they targeted a Saudi oil tanker in the Gulf of Aden, and the group has also issued threats against other vessels in the Red Sea.
In the United States, crude stockpiles have rebounded from their lowest levels since 2018, with inventories at Cushing, Oklahoma, rising above the 20 million barrels threshold, which is widely regarded as the operational minimum, according to government data released on Wednesday. Additionally, distillate exports, primarily consisting of diesel, have reached a new record.
