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by Stockwatch Business Reporter

West Texas Intermediate crude for August delivery lost $2.87 to $70.34, while Brent for August lost $3.34 to $73.74 (all figures in this para U.S.). Western Canadian Select traded at a discount of $11.00 to WTI, up from a discount of $12.80. Natural gas for July added seven cents at $3.22. The TSX energy index tumbled 12.52 points to close at 375.10.

Oil prices slumped to their lowest levels since before the U.S.-Israel-Iran war began in February, amid signs that shipping through the Strait of Hormuz is returning to normal. The International Maritime Organization says safety guarantees are in place for a co-ordinated effort to move hundreds of ships stranded in the Persian Gulf. Ships are also navigating with satellite signals switched on, showing rising confidence among shipowners.

If taps are turning back on in the Middle East, signs of tightness persist elsewhere. Today's weekly data from the U.S. Energy Information Administration (EIA) showed that U.S. commercial crude stocks fell by 6.1 million barrels last week, exceeding analysts' predictions of a decrease of 4.5 million barrels. Inventories at the key Cushing hub in Oklahoma fell by 1.1 million barrels and now sit just below 19 million, a 12-year low seen as dangerously close to rock bottom. (The minimum operating floor is widely estimated to lie somewhere between 18 million and 20 million barrels, below which pressure constraints and degraded quality render the crude unusable).

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