Brent crude futures: Oil prices today: Why are International oil rates rising after two days of losses?
Brent crude futures were up 81 cents, or 0.77 percent, at $105.83 a barrel, and U.S. West Texas Intermediate futures were up 97 cents, or 0.99 percent, at $99.23 a barrel. Both indicators fell more than 5.6 percent on Wednesday after US President Donald Trump said talks with Iran were in the final stages, but also threatened further attacks if Iran did not agree to a peace deal.
Iran has warned of further attacks and announced steps to solidify control of the key Strait of Hormuz waterway, which carried shipments of oil and liquefied natural gas that accounted for about 20 percent of global consumption before the war but was largely closed.
“The sharp decline in oil prices seems to be pricing in the possibility of a breakthrough in talks,” said Haitong Futures analyst Yang An.
“However, if Trump insists on not making concessions to Iran, a deal seems unlikely and the final outcome of the negotiations could reverse sharply,” Yang said. On Wednesday, Iran announced a new “Persian Gulf Strait Administration”, saying it would be a “controlled maritime zone” in the Strait of Hormuz.
Iran effectively closed the strait in retaliation for US and Israeli attacks that started the war on February 28. Most fighting has stopped since a ceasefire in April, but Iran has limited traffic through Hormuz and the United States has blockaded the coastline.
Supply losses in the key Middle East region due to the war have forced countries to rapidly withdraw their commercial and strategic stockpiles, raising concerns about their offloading. The U.S. Energy Information Administration said Wednesday that the country withdrew nearly 10 million barrels of oil from the Strategic Petroleum Reserve last week, the largest draw in history. The EIA also said commercial crude oil inventories fell 7.9 million barrels last week to 445 million barrels, compared with analysts’ expectations for a decline of 2.9 million barrels in a Reuters poll.
Gasoline stocks fell 1.5 million barrels, while distillates rose 372,000 barrels.
