Oil prices slump after US reported to be close to framework deal to end Iran war
By Shadia Nasralla
LONDON, May 6 (Reuters) – Oil prices continued their decline on Wednesday, falling to two-week lows after Axios reported that Washington believes it is close to a one-page framework agreement to end the war with Iran.
Brent crude futures were down $6.70, or 6.1%, at $103.17 a barrel at 08:56 GMT, after hitting an almost two-week low. U.S. West Texas Intermediate lost $6.77, or 6.6%, to $95.50.
Both indicators were on track for their biggest daily declines in both percentage and absolute terms since mid-April, having lost nearly 4% in the previous session.
According to Axios, the United States expects Iran to respond to some important points within the next 48 hours. Although nothing has been agreed on yet, the report said this is the closest the sides have come to an agreement since the war began.
Iran has previously said it would only accept a fair and comprehensive deal.
The US military said Monday it destroyed several Iranian small boats as part of efforts to help stranded ships exit the Strait of Hormuz.
Losses in crude oil supply due to the halt of maritime traffic in the strait since the start of the war in February increased prices; Brent trading reached its highest level since March 2022 last week.
The closure of the Strait of Hormuz caused global oil and fuel stocks to decline as refineries tried to make up for production shortfalls.
While crude oil stocks in the United States have fallen for the third week, gasoline and distillate stocks also decreased, market sources reported Tuesday, citing figures from the American Petroleum Institute.
Crude stocks fell by 8.1 million barrels in the week ending May 1, sources said. Sources said gasoline stocks fell by 6.1 million barrels compared to a week ago, and distillate stocks fell by 4.6 million barrels.
Official figures from the EIA, the statistical arm of the US Department of Energy, will be released at 14:30 GMT.
(Reporting by Shadia NasrallaAdditional reporting by Helen Clark in Melbourne and Jeslyn Lerh in Singapore Editing by David Goodman)
