Oil prices climbed for a fourth straight session as tanker traffic through the Strait of Hormuz thins out and Washington and Tehran remain locked in a standoff over the waterway. A drop in U.S. crude inventories added further support.
Oil extended its rally on Wednesday as the U.S.-Iran standoff in the Strait of Hormuz showed few signs of ending soon, fueling bets that global crude oil supplies could stay tight in the coming months. The standoff has now weighed on the market for four consecutive sessions.
Brent oil futures rose 0.3% to $91.32 a barrel. U.S. West Texas Intermediate crude rose 0.4% to $85.28 a barrel, with both benchmarks floating around three-week highs after a week of strong gains.
Tanker traffic through Hormuz eases
Shipping data cited by Reuters showed six commodity vessels transited the strait on Tuesday, down from nine a day earlier, against a 10-day daily average of 11. According to ING: "have also raised concerns over potential oil supply disruptions".
U.S. Secretary of State Marco Rubio spoke with United Arab Emirates National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan about Gulf security, with both emphasizing the importance of maintaining freedom of navigation through the strait, Al Jazeera reported.
Washington and Tehran remain at odds
President Donald Trump said Tuesday that talks with Iran were not taking place and that none were scheduled, though he maintained the Strait of Hormuz remained open. Iran likewise said no talks with the U.S. were underway, but denied the strait was open and said it would stay shut until the U.S. meets the conditions of a now-expired interim deal signed in June. That framework lapsed this week, with neither side signaling intent to renew it.
Inventories add to the tightness
Data from the American Petroleum Institute pointed to a small contraction in U.S. crude inventories last week, a figure that usually foreshadows the official government data due later the same day. Falling inventories come as the U.S. Strategic Petroleum Reserve has dropped to its lowest level in more than 40 years amid the Iran war.
Source: Investing.com
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