Oil rises to 3-week high as Iran war impasse fuels Middle East supply concerns
Oil prices climbed to three-week highs as uncertainty over the Iran conflict and Strait of Hormuz disruptions raised supply concerns. Brent rose 2.39% to $93.81, while WTI gained 2.89%. Both benchmarks headed for fifth consecutive sessions of gains.
By ETMarkets.com |
Agencies
Crude prices climbed as prolonged Iran tensions and disrupted Strait of Hormuz flows heightened concerns over Middle East oil supplies and refined-fuel availability.
Oil prices rose to their highest levels in more than three weeks on Thursday, as concerns mounted that the deadlock in the Iran war would continue disrupting supplies from the key Middle Eastern producing region, Reuters reported.
Brent crude futures for October delivery gained $2.19, or 2.39%, to $93.81 a barrel at 1257 GMT. US West Texas Intermediate crude futures for September rose $2.33 to $88.16 a barrel, while the more-active October WTI contract advanced $2.44, or 2.89%, to $86.83.
Brent and WTI were at their highest levels since July 24 and headed for a fifth consecutive session of gains. September WTI contract is set to expire later on Thursday.
“Tensions in the Middle East remain high, leaving room for further supply disruptions,” said UBS analyst Giovanni Staunovo. “Lower oil exports from the Middle East are once again tightening the oil market.”
US President Donald Trump said on Tuesday that no negotiations were taking place with Iran and that the Strait of Hormuz was open. Iran, however, maintained that the waterway remained closed.
The UAE’s move to suspend all financial and economic transactions with Iran until further notice renewed attention on strained relations between the major Gulf Arab oil producer and Tehran.
“Oil prices remained elevated as the market is supported by sporadic attacks in the Middle East but lacks fresh momentum without a major escalation,” Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, told Reuters.
“The market is likely to maintain a gradual upward trend given uncertainty over peace talks and tensions involving the United Arab Emirates, Oman and Iran,” he added.
On Wednesday, Trump warned of economic consequences for any country providing “any type of lifeline to Iran”.
Shipping traffic through the strait was unchanged on Wednesday from the previous day as efforts to end the conflict remained at an impasse, according to the latest shipping data.
Before the war began with US and Israeli strikes on Iran on February 28, shipments equivalent to about one-fifth of global consumption passed through the waterway. Current flows remain far below pre-war levels.
The conflict has also disrupted refined-fuel supplies and reduced inventories, with less crude available for refiners.
US inventories of distillate fuels, including diesel and heating oil, declined last week for a third consecutive week, the Energy Information Administration said on Wednesday. Crude inventories, however, unexpectedly increased by 4.4 million barrels.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
Brent crude futures for October delivery gained $2.19, or 2.39%, to $93.81 a barrel at 1257 GMT. US West Texas Intermediate crude futures for September rose $2.33 to $88.16 a barrel, while the more-active October WTI contract advanced $2.44, or 2.89%, to $86.83.
Brent and WTI were at their highest levels since July 24 and headed for a fifth consecutive session of gains. September WTI contract is set to expire later on Thursday.
“Tensions in the Middle East remain high, leaving room for further supply disruptions,” said UBS analyst Giovanni Staunovo. “Lower oil exports from the Middle East are once again tightening the oil market.”
US President Donald Trump said on Tuesday that no negotiations were taking place with Iran and that the Strait of Hormuz was open. Iran, however, maintained that the waterway remained closed.
The UAE’s move to suspend all financial and economic transactions with Iran until further notice renewed attention on strained relations between the major Gulf Arab oil producer and Tehran.
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“Oil prices remained elevated as the market is supported by sporadic attacks in the Middle East but lacks fresh momentum without a major escalation,” Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, told Reuters.
“The market is likely to maintain a gradual upward trend given uncertainty over peace talks and tensions involving the United Arab Emirates, Oman and Iran,” he added.
On Wednesday, Trump warned of economic consequences for any country providing “any type of lifeline to Iran”.
Shipping traffic through the strait was unchanged on Wednesday from the previous day as efforts to end the conflict remained at an impasse, according to the latest shipping data.
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Before the war began with US and Israeli strikes on Iran on February 28, shipments equivalent to about one-fifth of global consumption passed through the waterway. Current flows remain far below pre-war levels.
The conflict has also disrupted refined-fuel supplies and reduced inventories, with less crude available for refiners.
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US inventories of distillate fuels, including diesel and heating oil, declined last week for a third consecutive week, the Energy Information Administration said on Wednesday. Crude inventories, however, unexpectedly increased by 4.4 million barrels.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
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