Oil Rises as Iran Deal Optimism Fades
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 rose as doubts grew that an Iran-Oman deal would quickly restore normal shipping through the Strait of Hormuz.
Oil rose in a choppy session as signs mounted that a potential Iran-Oman deal wouldn’t lead to a full-fledged resumption of shipments through the Strait of Hormuz, tempering some optimism that had built in previous days.
Brent climbed 3.8% to settle above $82 a barrel, after swinging between small gains and losses. Futures have been highly sensitive to headlines around progress toward a deal.
The commodity surged to intraday highs after Iranian media reports that Tehran will seek to bar US and Israeli ships from the waterway and require compensation from hostile countries before they’re allowed to use it. Traders interpreted the report to mean Gulf state exports will remain restricted in the near term.
Even before the latest development, the outlook for an agreement had been growing murkier. Iran said a pact on proposed shipping lanes was in the final stages. But the country has insisted that Washington is not part of the agreement with Oman and hinted a normalization of the strait will depend on the lifting of an American blockade on Iranian ports, keeping traders on edge.
“Crude traders remain focused” on the status of a potential pact, said Dennis Kissler, senior vice president for trading at BOK Financial Securities Inc. “The longer the delays, the more prices will fade back to the upside.”
The White House didn’t respond to a request for comment on the announcement of a pending deal. US President Donald Trump said at a rally in Las Vegas on Wednesday evening that the US is talking to Tehran and he will “see what happens” in negotiations.
Even so, prices are holding most of this week’s slump after Iran and the US indicated a resolution was close for shipping through the crucial energy chokepoint. A return to normalized flows through Hormuz would unlock millions of barrels of oil shipments disrupted by the now five-month-old conflict.
Other risks also emerged, reinforcing traders’ reluctance to fully unwind long positions for fear of being wrong-footed by a sudden escalation. In a sign of persistent threats to shipping in the Middle East, the UK Navy reported on Thursday a tanker hearing two explosions while transiting the strait near Kumzar, Oman.
Earlier, Iran-backed Houthi militants in Yemen said they targeted a Saudi oil tanker in the Gulf of Aden. The group launched attacks in central and eastern Yemen on Thursday, killed at least 30 of the internationally recognized government troops, the AP reported, citing officials from the government.
Elsewhere, oil loadings at the key Caspian Pipeline Consortium terminal on the Black Sea resumed after being halted by the risk of drone attacks nearby.
Oil Prices
- WTI for September delivery was 2.8% higher to settle at $77.29 a barrel in New York.
- Brent for October settlement was up 3.8% to settle at $82.49 a barrel.
by Bloomberg | M. Gindis, C. Gorrivan
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas