Oil prices stabilised in early trading on Thursday as investors evaluated the implications of the U.S.-Iran conflict and the safety of maritime routes through the Strait of Hormuz. Brent crude futures for October delivery increased by 25 cents, or 0.3%, reaching $91.87 a barrel as of 0037. In contrast, U.S. West Texas Intermediate crude futures for September experienced a decline of 2 cents, settling at $85.81 a barrel. The more active October WTI contract increased by 14 cents, or 0.2%, reaching $84.53.
Both Brent and WTI benchmarks experienced an increase for a fourth consecutive session on Wednesday, concluding at their peak since July 24. The September WTI contract is set to expire 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. “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 brought renewed attention to the complex relationship between the significant Gulf Arab oil producer and Iran.
On Tuesday, U.S. President Donald Trump stated that no discussions were occurring with Iran and confirmed that the Strait of Hormuz remained open. Iran, however, stated that the waterway remained closed. Shipping through the Strait of Hormuz experienced a slowdown, according to data released on Wednesday, as the majority of shipowners opted to bypass the crucial waterway due to ambiguous indications regarding its reopening following a blockade instituted during the Iran war. The Energy Information Administration reported on Wednesday that crude and petrol inventories in the U.S. experienced an increase, while distillate stockpiles saw a decline last week. Crude inventories increased by 4.4 million barrels for the week ending August 14, contrasting with expectations of a 600,000-barrel decline.
