Brent oil prices edged higher in early Wednesday trading, with December contracts rising above $96 per barrel, after the US President denied reports that Washington was considering easing sanctions on Iran. The comments reduced some of the optimism surrounding diplomatic efforts between the two countries and reinforced the geopolitical risk premium that continues to support oil prices. Qatar is still attempting to mediate between Washington and Tehran, but significant uncertainty remains over the prospects for an agreement and the reopening of the Strait of Hormuz. Meanwhile, the supply picture has improved, limiting the extent of today’s gains. Saudi Arabia has resumed tanker loadings from its Red Sea port of Yanbu following the restart of the East-West pipeline, while other Middle Eastern crude exports have recovered significantly. Against this backdrop, oil prices are likely to remain highly sensitive to developments in the US-Iran negotiations. Attention will also turn to the release of the Energy Information Administration’s weekly US crude oil inventories later today, which could generate further volatility, particularly if the figures differ significantly from market expectations.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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