Brent oil prices rose, revisiting the $100 per barrel mark in early Thursday trading. This follows strong gains during the previous session, as uncertainty surrounding the US-Iran conflict continues to support a significant geopolitical risk premium. Diplomatic efforts between Washington and Tehran appear to have stalled, with significant differences remaining between the two sides and little immediate prospect of a full reopening of the Strait of Hormuz. However, improving supply conditions are limiting the potential for further gains. Gulf crude exports have recovered significantly in recent weeks, helped by the resumption of Saudi shipments from Yanbu and increased use of alternative routes, while yesterday’s EIA report showed an unexpected increase in US crude inventories. Against this backdrop, oil prices are likely to remain volatile, caught between persistent geopolitical risks and signs that global supply conditions are gradually improving. Developments in the US-Iran negotiations and shipping activity through the Strait of Hormuz will remain the main drivers in the short term.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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