Oil Falls as Iran Talks Remain Stalled
by Bloomberg | M. Gindis, C. Gorrivan
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil snapped its run of recent gains, as limited progress over a deal to end the Iran war left traders parsing how much oil is crossing the Strait of Hormuz.
West Texas Intermediate settled around $81 a barrel, after rising about 10% over the prior five sessions. Futures have grown increasingly desensitized to White House rhetoric on the waterway, while signs of profit-taking emerged on Thursday after the recent run-up in prices.
“This morning’s action feels more like a buyer strike than a market with real conviction to the downside,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “Add yesterday’s large US crude inventory build, and there simply isn’t much giving buyers a reason to step in right.”
Traders are assessing how much oil is currently crossing Hormuz. Energy Secretary Chris Wright said Tuesday that flows averaged 9 million barrels a day over the past week, well above several industry estimates and raising fresh questions about the extent of supply shortfalls. Meanwhile, crude stockpiles rose by 17.4 million barrels last week, according to the Energy Information Administration, potentially offering some near-term relief to prices.
The commodity walked back some losses after Yemen’s Houthis said they targeted Saudi Aramco’s oil refinery in Jazan on the Red Sea coast. That follows an attack by the militant group on the site earlier this week, prompting Saudi Aramco to delay restart plans.
Elsewhere, top producers from the United Arab Emirates to Saudi Arabia are doing what they can to keep exports flowing, with vessels switching off transponders to shuttle cargoes through Hormuz without detection and finding other workarounds. At least 9 million barrels from the Middle East are set to arrive at US ports throughout August.
Still, crude is headed for a weekly gain as talks between the US and Iran appear deadlocked and both sides harden their positions, with Washington pressing on with a blockade of the Islamic Republic’s ports. US President Donald Trump has claimed to have “total control” over the waterway, and has shifted his focus to economic pressure.
“I struggle to see how we can come down quickly unless things get better on the geopoltiical front,” Francisco Blanch, head of commodities research at Bank of America Global Research, said in a Bloomberg Television interview. “If you run out of inventories, price volatility has to shoot up and you have to ration demand.”
The global oil market faces a shortfall of 1.8 million barrels a day this quarter, more than double an earlier projection as the US-Iran war drags on, according to the International Energy Agency, which also cautioned that crude demand was being eroded by higher prices. For 2026 as a whole, the deficit will likely be the widest in five years, the IEA said in a report on Wednesday.
Oil Prices
Crude retreated as traders assessed Hormuz shipments and rising US inventories.
- Brent for October settlement dropped 2.2% to settle at $87.07 a barrel in New York.
- WTI for September delivery fell 2.4% to settle at $81.25 a barrel.
For US consumers, gasoline and diesel have never been this expensive, this late in the year, according to the American Automobile Association. That comes as millions of Americans typically take to the road for vacations and family visits.
by Bloomberg | M. Gindis, C. Gorrivan
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas