Khaberni - Oil prices fell by more than two percent on Thursday, but they remained close to their highest levels in several months, after the United States and Iran agreed to hold talks in Oman on Friday.
Brent crude futures fell $1.54, or 2.2 percent, to $67.92 a barrel by 1306 GMT.
West Texas Intermediate crude in the U.S. dropped $1.52, or 2.3 percent, to $63.62 a barrel.
Giovanni Staunovo, an analyst at UBS, said that oil prices are heavily influenced by tensions in the Middle East, as markets closely watch the talks in Oman.
These talks come at a time when the United States is reinforcing its military presence in the Middle East, as parties in the region seek to avoid a military confrontation that many fear could escalate into a wider war.
About a fifth of the world’s total oil consumption passes through the Strait of Hormuz, located between Oman and Iran. Other OPEC member countries, such as Saudi Arabia, the UAE, Kuwait, and Iraq, export most of their crude oil through the strait, in addition to Iran itself.
John Evans, an analyst at BVM, said the market will likely see fluctuations before the meeting tomorrow, Friday, amid hopes for diplomatic progress.
However, he added, "there is no room for complacency regarding prices, as just an unexpected statement or stalling negotiations could push the price of Brent crude to the $70 per barrel level, nearing its highest levels this year."
Analyzers mentioned that the strength of the dollar and fluctuations in precious metal prices have put pressure on commodity prices and overall risk appetite today, Thursday.
Traders said that discounts on Russian oil exports to China have increased to new record levels during this week to attract demand from the largest crude oil importing country in the world and to compensate for the potential loss in sales to India.
These discounts came after a trade agreement between the United States and India earlier in the week, under which New Delhi agreed to stop purchasing Russian crude oil.
