Oil climbs after Trump denies he is willing to ease sanctions on Iran

[PERTH] Oil prices rose on Wednesday (Sep 30) after US President Donald Trump denied he would be willing to ease sanctions on Iran while Qatar pushed for peace talks, after falling in the previous session on a recovery in crude supply from the Middle East.

Brent crude futures rose US$1.14, or 1.1 per cent, to US$103.73 a barrel by 1.31 am GMT. US West Texas Intermediate (WTI) crude gained US$0.34, or 0.4 per cent, to US$89.72.

Brent is headed for a monthly gain of around 14 per cent, its biggest climb since July, while WTI is on track for a 4 per cent rise after having breached US$106 for the first time since May.

The spread between the two benchmarks in September also expanded to its widest in four months as traders watched potential plans by the US to restrict diesel exports, which could create an oversupply in the domestic market and lead US refiners to process less crude.

Trump is considering allowing sales of red-dyed diesel, instead of an export ban, to offer some price relief to consumers as the November midterm elections loom.

“Further evidence of recovering flows through the Strait of Hormuz, hope for alternatives to a US diesel export restriction will emerge, and no material Iranian escalation in the last 24 hours has seen prices come off a little,” Saul Kavonic, head of energy research at MST Marquee, said.

The situation “remains volatile, oil logistics are expensive and constrained”, he added.

Qatar said on Tuesday it hopes that shuttle diplomacy between Iran and the US can lead to a breakthrough.

“We are exchanging messages between the parties, and we’re working towards establishing a common ground in order to get into a deal that would save all of us from the repercussions of the conflict,” Qatari Foreign Ministry spokesperson Majed al-Ansari told reporters.

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However, Trump denied an Axios report that cited US officials as saying he was willing to give Iran sanctions relief and release frozen Iranian funds in return for “concrete” steps by Teheran on its nuclear programme.

“This is untrue. I offered them NOTHING,” Trump wrote on Truth Social.

On Tuesday, Saudi Arabia resumed oil tanker loadings from its Red Sea port of Yanbu after restarting operations on the East-West Pipeline.

Crude oil exports from Middle East producers have rebounded in September to 16.328 million barrels per day, the highest since the US-Israeli war with Iran started in late February.

US crude oil and petrol inventories rose, while distillate stocks fell last week, market sources said on Tuesday, citing data from the American Petroleum Institute.

Crude stocks rose by 1.02 million barrels in the week ended Sep 25, sources said.

Official inventory data from the US Energy Information Administration is due at 10.30 am EDT (2.30 pm GMT). Analysts polled by Reuters expect crude and product inventories to have fallen. REUTERS