Brent crude climbed for a fourth straight session after U.S. strikes on Iran and renewed Israeli threats against Tehran revived fears of Middle East supply disruptions. The rally coincides with a technical breakout that has lifted Brent above resistance it had failed to clear since May, while shipping data show fewer vessels transiting the Strait of Hormuz.
Brent crude futures rose 59 cents, or 0.62%, to $96.22 a barrel by 1327 GMT on Thursday, while U.S. West Texas Intermediate crude gained 78 cents, or 0.86%, to $91.79. Both contracts extended a four-day winning streak and touched six-week highs earlier in the session.
Iran reports casualties from U.S. strikes
Iran's health minister said 18 people were killed and 108 wounded in Tuesday night's U.S. strikes across the country, while the Iranian Red Crescent reported four killed and 67 wounded at a wedding near the Strait of Hormuz. The semi-official Tasnim news agency said three Iranian Army pilots were killed in the strikes, the most substantial exchange of fire between Washington and Tehran since July.
Israeli Defence Minister Israel Katz renewed warnings that Israel would cripple Iran's military and civilian infrastructure, including energy facilities, if Tehran struck back. Saxo Bank analyst Ole Hansen said those comments helped push oil prices higher. According to UBS energy analyst Giovanni Staunovo: "The oil market remains tight, with oil inventories still declining globally translating into higher prices."
Fewer tankers cross the Strait of Hormuz
Six commodity vessels transited the Strait of Hormuz on Wednesday, down from 11 a day earlier and below the 10-day average of around 13, preliminary shipping data showed. Iran also added ships to a list it deems non-compliant, subject to fines, confiscation or detention.
Iraqi vessels remain among those Iran allows through the strait, and Iraq raised its oil exports to about 2.34 million barrels per day in August, up from roughly 1.35 million bpd in July, as discounts and Iranian approvals encouraged buyers.
Chart breakout reinforces the move
Brent has broken above the descending trendline connecting its May and July highs and moved past the upper Anchored VWAP tracking the average price since its May peak, while a sequence of higher lows since July remains intact. Rising gas prices are also feeding into inflation expectations and pressuring global bond markets.
Higher oil prices and their inflation implications have lifted bets on an interest rate hike from the Federal Reserve this month. Traders are now watching whether Brent can hold the ground it has regained above former resistance.
Sources: Commodities & Futures News, Commodities Analysis & Opinion
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