Crude extends decline as Iran-Oman talks raise hopes for increased Hormuz traffic
The WTI prompt-month contract fell $2.11 to $80.25/Bbl Wednesday morning (7:30 AM CT)
Crude futures declined for a third consecutive session after Iran and Oman discussed establishing a “temporary joint maritime corridor” through the Strait of Hormuz
The two countries are expected to hold additional talks aimed at negotiating a permanent shipping route within the next 30 to 60 days
A temporary arrangement could allow tanker traffic to increase, but uncertainty remains over whether any agreement would prove durable
“However, this does not change the fact that market sentiment has turned and that, in the short term, oil prices are headed lower,” said Arne Lohmann Rasmussen of A/S Global Risk Management
Elsewhere, China said it would take “all necessary measures” to protect its interests following the US Treasury’s threat to sanction institutions that continue doing business with Iran
Domestically, the American Petroleum Institute reported that US crude inventories increased by 4.2 MMBbl last week, with official EIA data scheduled for release later Wednesday
Gas Jumps as power burn climbs back
Natural gas is up 5.9c to $2.829/MMBtu. (As of 07:30 AM CDT)
Total power burn climbed over 1 Bcf/d day over day to roughly 50 Bcf/d
