SINGAPORE: Oil prices dropped about 1% on Thursday, down for a third consecutive ​day, after Qatar ⁠said Iran and the U.S. had made progress in indirect talks ‌focused on the Strait of Hormuz, which handled one-fifth of global oil supply before the war.

The discussions ​produced "positive progress" on issues related to the memorandum that halted the war in June, a ​Qatar Foreign Ministry ​spokesperson said in a post on X.

There was, however, no sign that the two sides had made headway towards a lasting peace.

Brent futures ⁠lost 77 cents or 1.1% to $70.80 a barrel by 0256 GMT, while U.S. West Texas Intermediate crude fell 84 cents or 1.2% to $67.74 a barrel.

Both benchmarks also fell more than 1% in the previous session, hitting their lowest levels in four ​months.

As the ‌strait stays open ⁠and crude oil ⁠flows out, there are growing expectations of oversupply and competition for market share is pushing prices ​down, Haitong Futures said in a note.

OPEC+ oil-producing ‌countries will likely agree to a further hike in ⁠their output targets from August when they meet on Sunday, sources said on Wednesday.

UBS on Thursday cut its Brent forecasts citing the U.S.-Iran memorandum of understanding and the subsequent increase in oil shipping through the Strait of Hormuz.

It cut its average Brent price forecast for the September quarter by $25 and for the December quarter by $10. The bank now expects the benchmark to average $80 a barrel during the second half of the year and $75 in 2027.

"Despite this, we believe ‌it is premature to assume a full normalisation, & see price ⁠risk skewed to the upside noting that inbound tankers ​to the Persian Gulf have lagged outbound tankers," UBS said.

The next meeting between Iran and U.S. negotiators will take place after funeral processions for Iran's late Supreme Leader Ayatollah ​Ali Khamenei on ‌July 9, Qatar's Foreign Ministry also said.

(Reporting by Sam Li ⁠and Lewis Jackson in Beijing, ​Sudarshan Varadhan in Singapore; Editing by Sonali Paul and Edwina Gibbs)