Brent and WTI crude both climbed to three-week highs on Thursday, gaining for a fifth straight session as the impasse over the Iran war keeps Middle East supply at risk. The UAE's move to suspend financial ties with Iran renewed focus on the standoff, while shipping flows through the Strait of Hormuz stayed far below pre-war levels.
Brent crude futures for October delivery rose $2.80, or 3.1%, to $94.42 a barrel by 1204 GMT on Thursday. The more-active October WTI contract gained $2.87, or 3.4%, to $87.26. The September WTI contract, which expires later Thursday, added $2.84 to $88.67. Both benchmarks hit their highest levels since July 24.
UAE cuts ties with Iran
The UAE's decision to suspend all financial and economic transactions with Iran until further notice refocused attention on strained ties between the Gulf Arab producer and Iran. According to Reuters: "Tensions in the Middle East remain high, leaving room for further supply disruptions," said UBS analyst Giovanni Staunovo.
President Donald Trump said Tuesday that no talks were taking place with Iran and that the Strait of Hormuz was open, but Iran said the waterway remained shut. Trump warned Wednesday of economic consequences against any country that provided a lifeline to Iran.
Shipping and stockpiles
Shipping traffic through the strait was unchanged Wednesday from the day before as talks to end the conflict stayed deadlocked. Before the war began with U.S. and Israeli strikes on Iran on February 28, shipments equal to about one-fifth of global consumption moved through the waterway; current flows remain far below pre-war levels.
The war has also drawn down refined fuel supplies, leaving less crude oil available to refiners. U.S. distillate stockpiles, including diesel and heating oil, fell for a third week, the Energy Information Administration said Wednesday. Crude inventories, however, unexpectedly rose by 4.4 million barrels.
Source: Investing.com
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