Crude oil prices fall amid signs that the US is easing Iran’s blockade of the Strait of Hormuz
Crude oil prices fell more than 1% on May 5 amid signs that the US Navy is loosening Iran’s grip on the Strait of Hormuz, potentially opening up access to supplies from the Middle East, Reuters reported.
Brent crude futures for July delivery fell $1.22, or 1.1%, to $113.22 a barrel by 03:23 GMT after rising 5.8% on Monday. U.S. West Texas Intermediate (WTI) crude fell $2.02, or 1.9%, to $104.40 a barrel after jumping 4.4% in the previous session.
Some analysts attributed Tuesday’s decline in oil prices to profit-taking.
“The current decline is more like profit-taking after a rapid rise than a structural change in the background of events. In the short term, prices may enter a period of some consolidation or a slight decline while the market rethinks positioning and reacts to conflicting diplomatic signals,” explained Priyanka Sachdeva, senior market analyst at Phillip Nova.
Goldman Sachs experts reported that global oil inventories are approaching their lowest level in the last eight years, warning that the rapid reduction in reserves is becoming a critical factor against the backdrop of limited supplies.
“As the world rapidly depletes commercial reserves, strategic reserves and oil stored in floating storage, the underlying supply shortage continues to be a powerful driver of price growth,” IG market analyst Tony Sycamore emphasized.
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