Brent adds value from some lingering geopolitical risks
The front-month ICE Brent contract has gained by $0.61/bbl on the day, to trade at $67.39/bbl at 09.00 GMT.
IMAGE: An oil pumpjack. Getty Images
Upward pressure:
Brent crude’s price has moved higher as lingering geopolitical risks continue to influence market sentiment.
Last week, Iran halted access to the International Atomic Energy Agency (IAEA) for inspections. Iranian nuclear-safety regulators have also stopped taking calls from the UN watchdog, Bloomberg reports.
“The blackout raises the spectre that Iran is using silence as a way to obscure international understanding of the status of its nuclear program,” remarked ANZ Bank senior commodity strategist Daniel Hynes.
The news has prompted market speculation of a potential cold war-like standoff, with the US possibly intensifying oil sanctions on Tehran.
“President Trump said the US will be there unless Iran backs away from its nuclear program,” Hynes added.
Downward pressure:
Brent’s gains have been capped after the American Petroleum Institute (API) reported a surprise build in commercial US crude stocks.
US crude oil inventories rose by 680,000 bbls in the week ending 27 June, according to the API. Market analysts expected a draw of 2.26 million bbls.
The data was “bearish on balance with a modest build in crude,” said Vanda Insights founder Vandana Hari.
An increase in US crude stockpiles can signal weaker demand and can dampen Brent's price.
The closely followed official data from the US Energy Information Administration (EIA) is due for release later today.
By Aparupa Mazumder
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