Oil prices fell more than $1 on Thursday, extending a streak of losses, on expectations that talks between Iran and Qatar might open the Strait of Hormuz and reduce supply disruptions from the Middle East war. Brent crude futures were down $1.36, or 1.55%, to $86.48 a barrel at 0800 GMT, in line for a fourth day of declines. West Texas Intermediate crude futures fell $1.40, or 1.7%, to $80.83, in line for a fifth day of losses, Reuters reported. "Oil has weakened again today as the market prices in rising expectations that a deal could materialize which would increase shipping numbers through the Strait of Hormuz," KCM chief market analyst Tim Waterer said. "If Hormuz were to reopen more fully, a further leg lower in crude is possible, but the market is unlikely to price a complete return to pre-conflict levels overnight." Qatar's prime minister will head to Iran on Thursday to relaunch diplomatic talks to end the conflict, which is nearly six months old. The visit comes as the war nears its sixth month with fighting largely paused but no diplomatic breakthrough in sight. Both sides are at odds over control of the Strait of Hormuz, a chokepoint for global oil supplies that Tehran has used as leverage. The strait, which handled about one-fifth of global daily oil and liquefied natural gas supplies before the conflict began in late February, has been at the center of concerns over global energy supplies because of its critical role as a transit route for exports from major Gulf producers. Shipping traffic at the strait rose slightly on Wednesday despite the standoff, data showed. A senior Iranian source on Wednesday said Iran and Oman were working on finalizing details of an agreement to control the Strait of Hormuz, after Iran's Revolutionary Guards said the two countries had agreed how to share the waterway. The US has halted its attacks on Iran for about a month and is seeking to impose greater economic pressure on Iran, which has raised investors' expectations for an easing of the Gulf supply disruptions. "At the heart of the dispute remains Iran's nuclear program and that is unlikely to be resolved quickly ... Iran also understands the importance of its geographical position and the leverage that the Strait of Hormuz provides, so the risk of prolonged uncertainty remains," said Priyanka Sachdeva, head of market insights at Phillip Nova.
