Oil prices steady as investors assess US-Iran war outlook
Both benchmarks closed at their highest since Jul 24
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[TOKYO] Oil prices steadied in early trade on Thursday (Aug 20) as investors assessed the outlook for the US-Iran war and the security of shipping through the Strait of Hormuz.
Brent crude futures for October delivery rose 25 cents, or 0.3 per cent, to US$91.87 a barrel by 0037 GMT, while US West Texas Intermediate crude futures for September slipped 2 cents to US$85.81 a barrel. The more active October WTI contract gained 14 cents, or 0.2 per cent, to US$84.53.
Both Brent and WTI benchmarks gained for a fourth straight session on Wednesday, settling at their highest since Jul 24. The September WTI contract expires later on Thursday.
“Oil prices remained elevated as the market is supported by sporadic attacks in the Middle East but lacks fresh momentum without a major escalation,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.
“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.
The UAE’s decision to suspend all financial and economic transactions with Iran until further notice has refocused the spotlight on fraught ties between the major Gulf Arab oil producer and Iran.
On Tuesday, US President Donald Trump said no talks were taking place with Iran and that the Strait of Hormuz was open. Iran, however, said the waterway remained shut.
Shipping through the Strait of Hormuz slowed, data showed on Wednesday, as most shipowners avoided the key waterway because of a lack of clear signalling on its reopening from a blockade put in place during the Iran war.
In the US, crude and petrol inventories rose and distillate stockpiles fell last week, the Energy Information Administration said on Wednesday.
Crude inventories rose by 4.4 million barrels in the week ended on Aug 14, compared with estimates for a 600,000-barrel draw. REUTERS
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