Oil prices turned lower on Thursday as traders booked profits, though both benchmarks stayed close to one-month highs. WTI eased to $79.45 a barrel and Brent to $84.95, with U.S.-Iran tensions keeping a floor under the market.
Oil gave back early gains on Thursday as traders took profits, with WTI down 15 cents, or 0.19%, to $79.45 a barrel. The pullback came after both contracts had pushed toward the top of their recent range.
Brent crude slipped alongside it, falling 24 cents, or 0.28%, to $84.95 a barrel. Brent had gained almost $1 earlier in the session, and both contracts remained close to one-month highs.
Middle East tensions underpin the market
The profit-taking did little to unwind the rally’s driver. Prices are holding near a monthly high because renewed tensions between the U.S. and Iran continue to underpin the market, according to FOREX.com analyst Fiona Cincotta.
The pressure escalated this week. The U.S. reimposed a naval blockade on Iranian ports, while Tehran threatened to disrupt more regional energy exports. Shipping through the Strait of Hormuz stayed well below normal, with just seven vessels transiting the waterway on Wednesday, down from 13 a day earlier.
Traders hold back from pricing a wider conflict
Yet the market has paused after the sharp rally earlier in the week, as mediation efforts by neighbouring countries continue. The steadiness around current levels suggests investors are not yet pricing in a full-scale regional conflict, Cincotta noted, even as a geopolitical risk premium stays embedded in the price.
The path from here depends on supply flows. Oil could remain elevated into the fourth quarter if export flows recover only slowly, with global inventories already drawn down over the second quarter. A sustained easing in tensions and faster production, by contrast, could see crude move back towards the $60 area by year-end.
Sources: Qatar News Agency, FOREX.com
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