Oil Jumps on Hormuz Shipping Attacks
by Bloomberg | A. Longley, K. Matsuyama, M. Gindis
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil climbed almost 6% after attacks on Persian Gulf shipping prompted the US to revoke a waiver that had relaxed restrictions on Iranian crude sales.
West Texas Intermediate topped $72 a barrel in post-settlement trading Tuesday after three ships that included a Saudi oil tanker and a Qatari natural gas carrier were struck in and around the Strait of Hormuz, threatening an already fragile ceasefire between the US and Iran.
The attacks spurred the US Treasury Department to revoke a waiver that allowed the sale of Iranian oil. Easing restrictions on Iran’s oil sector was a key pillar of the interim peace agreement, raising the prospect of renewed fighting that would choke crude exports from the region.
The strait, which links Persian Gulf producers to global markets, has partially reopened following its near-total closure triggered by the US-Iran war. Still, while traffic is recovering, movements remain below pre-conflict levels.
“The market is no longer paying a substantial premium for geopolitical risk, but nor is it completely dismissing the possibility of further disruptions,” said Fawad Razaqzada, a market analyst at Forex.com. “The near-term crude oil outlook is starting to look a bit more constructive now with the bulk of the selling behind us.”
Oil sank 30% in the second quarter as Washington and Tehran agreed to the interim peace deal, easing concerns over supply disruptions from the Middle East. Global benchmark Brent has fully erased the war premium that had built up in recent months, with some leading banks including Goldman Sachs Group Inc. and Morgan Stanley now warning there’s a risk a glut will return.
Iran told the United Nations’ shipping agency that it has authority over parts of Hormuz. The country’s efforts to control the waterway, and ultimately charge fees for ships that cross it, are being closely monitored by the shipping industry and its neighbors.
Meanwhile, European natural gas futures extended gains, jumping as much as 9.1% on concern the shipping attacks will cut off movement of liquefied gas tankers through the vital waterway.
Oil Prices
The US revoked a waiver allowing Iranian oil sales following shipping attacks that threatened the fragile ceasefire with Iran.
- Brent for September settlement added 3% to settle at $74.16
- WTI for August delivery gained 2.8% to settle at $70.44 a barrel in New York
- The advance extended in post-settlement trading to as much as $72.51
by Bloomberg | A. Longley, K. Matsuyama, M. Gindis
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas