Oil prices continued to fall on Wednesday, dropping to their lowest levels in two weeks after a Pakistani source said the United States and Iran are nearing a preliminary peace agreement.
Brent crude futures fell by $10.07, or 9.2%, to $99.80 per barrel by 10:42 GMT, slipping below the $100 mark for the first time since April 22.
U.S. West Texas Intermediate crude dropped by $10.79, or 10.6%, to $91.48 per barrel.
Both benchmarks were heading for their largest daily percentage and absolute declines since mid-April, after already losing nearly 4% in the previous session.
A Pakistani source involved in mediation efforts said Washington and Tehran are close to reaching an agreement on a one-page memorandum of understanding.
Meanwhile, Axios reported, citing sources, that the United States expects responses from Iran on several key issues within the next 24 to 48 hours. The sources described the development as the closest the two sides have come to an agreement since the war began.
Iran had previously stated that it would only accept a fair and comprehensive deal.
The U.S. military said Monday it had destroyed several small Iranian boats, as well as cruise missiles and drones, while escorting two ships out of the Gulf through the Strait of Hormuz.
Disruptions to maritime navigation through the strait since the outbreak of the war in February have reduced oil supplies and pushed crude prices higher, with Brent crude reaching its highest level since March 2022 last week.
The closure of the Strait of Hormuz also contributed to declining global inventories, as refineries sought to compensate for supply shortages.
Meanwhile, market sources citing figures from the American Petroleum Institute said U.S. crude oil inventories declined for the third consecutive week. Gasoline and distillate stockpiles also fell.
According to the sources, crude inventories dropped by 8.1 million barrels during the week ending May 1, while gasoline inventories declined by 6.1 million barrels and distillate inventories fell by 4.6 million barrels compared to the previous week.
Reuters
