Crude futures were down midday Thursday after the U.S. and Iran signed a preliminary agreement that could pave the way for reopening the Strait of Hormuz.
As of 11:10 a.m. ET, the July West Texas Intermediate contract was trading $2.69 lower at $74.10/bbl, while August WTI was down $2.75 at $73.26/bbl. The August ICE Brent crude contract had fallen $2.55 to $77/bbl, with September down $2.43 at $76.80/bbl.
Refined product futures were also trading lower, with July ULSD falling 14.03cts to $30543/gal and August ULSD down 13.12cts at $3.0126/gal. The July RBOB contract was trading 3.22cts lower at $2.8774/gal, with August down 3.61cts at $2.7972/gal.
The agreement, signed Wednesday by President Trump and Iranian President Masoud Pezeshkian, calls for Tehran to reopen the Strait of Hormuz after Washington lifts sanctions on Iranian oil sales and restrictions on Iranian ports.
The prospect of renewed flows through the strait weighed on crude prices. "The interim deal paves the way for the Strait of Hormuz to reopen, threatening to unleash a wave of trapped barrels onto the market," a Tradu analyst wrote.
