August Brent futures drop to $73, the lowest since late February, as near-term supply glut weighs on prompt prices.
August Brent futures fell to $73 a barrel on Thursday, the lowest level since February 27, as a surge in Middle East exports pushed the market into contango. The prompt contract traded 41 cents below September futures, signaling oversupply in the near term.
The shift into contango occurred Wednesday for the first time since the conflict began, driven by the reopening of the Strait of Hormuz after a U.S.-Iran deal. The strait carries about 20% of global oil supply, and its reopening released a wave of barrels into the market.
Around 20 million barrels have exited the strait in the past 24 hours, further pressuring prices. Analysts cited weak demand and a sharp drop in Chinese imports as additional headwinds for prompt prices.