Brent crude neared $99 a barrel on September 3 after fresh US strikes on Iran cut tanker traffic through the Strait of Hormuz roughly in half. Brent and WTI both marked a fourth straight day of gains, and traders raised bets on a Federal Reserve rate hike as the seven-month war keeps pushing energy costs higher.
Brent crude touched $99.38 a barrel by 8 a.m. Eastern on September 3, a gain of $3.27 from the previous morning, as fresh US airstrikes on Iranian missile and radar infrastructure reignited hostilities that a June ceasefire had been meant to end.
Hormuz tanker traffic drops in half
The Strait of Hormuz, the 21-mile-wide channel that carries roughly a fifth of the world's oil, is once again acting as a bottleneck. Six commodity vessels transited the strait on Wednesday, down from 11 the day before and well below the 10-day average of around 13, preliminary shipping data showed.
Iran also added more ships to a list it deems non-compliant, subject to fines, confiscation or detention if they attempt the passage. Crypto Briefing noted that traders should watch tanker transit data as the clearest real-time gauge of supply disruption, since a further drop toward six vessels a day would shorten the path to $100 oil.
WTI and Brent extend a fourth day of gains
Brent futures rose $1.66, or 1.7%, to $97.29 a barrel by 1200 GMT, while US West Texas Intermediate futures gained $2.03, or 2.2%, to $93.04. Both contracts marked their fourth straight day of gains after hitting six-week highs earlier in the session.
Later, Brent settled in the $95-to-$97 range, below its intraday peak of $99.38, as US officials signaled interest in curtailing the fighting long term.
Casualties mount as Israel warns on Iran's energy grid
Iran's health minister said 18 people were killed and 108 wounded in Tuesday night's US strikes across the country, while the Iranian Red Crescent reported four deaths and 67 injuries at a wedding near the Hormuz coast. Three Iranian Army pilots also died in the strikes, according to the semi-official Tasnim news agency, as the war entered its seventh month.
Israeli Defence Minister Israel Katz renewed warnings that Israel would move to cripple Iran's military and civilian infrastructure, including energy facilities, if Tehran struck first. Saxo Bank analyst Ole Hansen said Katz's comments helped fuel the latest jump in oil prices.
Fed rate-hike bets rise as oil stays tight
UBS energy analyst Giovanni Staunovo said, according to Reuters: "The oil market remains tight, with oil inventories still declining globally translating in higher prices." Traders have also increased bets on a Federal Reserve interest rate hike this month.
Brent now trades roughly 41% to 45% above year-ago levels, feeding the inflation concerns analysts flagged as they revised their price forecasts higher. Separately, Reuters reported Iraq raised oil exports to about 2.34 million barrels per day in August from around 1.35 million bpd in July, as heavy discounts and Iranian approvals for Iraqi tankers drew buyers through Hormuz.
Sources: Crypto Briefing, Commodities & Futures News
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