Brent advances as Washington and Tehran resume hostilities
The front-month ICE Brent contract has gained by $1.57/bbl on the day, to trade at $87.10/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent’s price has moved higher on the back of renewed military action in the Middle East.
Iranian military has launched ballistic missiles targeting US bases in the Middle East, while US and Saudi Arabian forces carried out strikes on Iran-linked logistics and weapons sites across eastern Iraq.
The renewed combat has shattered the brief truce that had fuelled hopes of some cooling in the market, analysts said.
“These [latest] developments throw cold water on the idea of a swift de-escalation in the Persian Gulf,” two analysts from ING Bank noted.
Adding further upward pressure on Brent, the American Petroleum Institute (API) reported a surprise draw of 3.3 million bbls in US crude stocks in the week ended 24 July, Reuters reported.
A decline in US crude stocks indicates tightness in the oil market and support Brent's price rise.
Downward pressure:
Talks of de-escalation in the Middle East have capped some of Brent crude’s price rally today. Yesterday, US President Donald Trump said Washington and Tehran had engaged in talks and that there was a “good chance” of a lasting deal.
Brent crude’s price felt some downward pressure as “traders positioned for potential progress towards peace talks in the Middle East conflict,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.
By Aparupa Mazumder
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