Summary
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- Brent set for third straight month of price falls, WTI set for second
- Brent prices trading close to February 27 level
- U.S. and Iran negotiators head to Doha, but meeting uncertain
- Morgan Stanley cuts Brent price forecast, flags 2027 surplus
(Reuters) – Oil prices were heading on Tuesday for their biggest quarterly loss since the COVID-19 pandemic in early 2020, with investors eyeing potential U.S.-Iran talks in Doha amid a strained interim ceasefire in the four-month-old war.
Brent August crude futures , which expire on Tuesday, were up 0.16%, or 12 cents, at $73.27 a barrel as of 0959 GMT. However, the contract was on track for a third straight monthly decline and was down about 20% so far in June. The more actively traded September contract gained 0.43%, or 32 cents, to $74.23 a barrel.
U.S. West Texas Intermediate for August rose 0.38%, or 27 cents, to $71.02 a barrel. However, the contract was down for the second straight month, by about 19% so far in June.
Both Brent and WTI prices are close to pre-war levels.
“I wouldn’t say the market has priced out a risk premium, but previously stranded ships have become available with the increase in ships moving out of the Gulf, creating a temporary wave of new supply,” UBS analyst Giovanni Staunovo said.
Iranian and U.S. negotiating teams were due in Doha this week, but Iran said on Monday no meeting had been scheduled as weekend missile fire from both sides tested the interim ceasefire to end the war.
Iranian and Omani experts will start talks on redefining transit paths through the Strait of Hormuz in the coming days, Iranian Deputy Foreign Minister Kazem Gharibabadi told state TV on Monday, adding that his country will try to obstruct vessels outside defined paths.
However, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said there will not be any negotiation meetings at any level with the American side in the coming days.
The uncertainty over whether the two sides would meet highlighted the fragility of a June 17 agreement to pause fighting that has disrupted global oil flows through the Strait of Hormuz and posed a political challenge for U.S. President Donald Trump ahead of November’s congressional elections.
Morgan Stanley cut its 2027 Dated Brent forecast by $5 a barrel, to $75 a barrel in the first half of the year and $70 a barrel in the second half, citing expectations of a build-up in OECD commercial oil inventories.
Morgan Stanley said it now models an implied global oil market surplus of 4.8 million barrels per day in 2027.
Meanwhile, Iraq’s SOMO has offered wide discounts to its official selling prices to encourage term buyers to lift Basrah crude from its terminal inside the Middle East Gulf in July, according to trade sources and a document reviewed by Reuters.
Reporting by Anushree Mukherjee and Pranav Mathur in Bengaluru and Trixie Yap in Singapore; Editing by Muralikumar Anantharaman, Alex Lawler and Susan Fenton
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