Brent gains as US-Iran deal hopes fade

The front-month ICE Brent contract has gained by $3.36/bbl on the day, to trade at $96.12/bbl at 09.00 GMT.

IMAGE: An oil storage facility. Getty Images

Upward pressure:

Brent crude’s price has felt some upward pressure after US President Donald Trump said Washington does not need a deal with Iran to end the war.

“We don’t need a deal with Iran. Those days have long since passed,” Trump wrote on social media platform Truth Social yesterday.

He added that the US controls Iran’s money and the Strait of Hormuz.

“Developments in the Strait of Hormuz remain the key driver for the oil market,” two analysts from ING Bank noted.

Attacks on commercial vessels transiting the Persian Gulf have also continued. Iran’s military said four oil tankers were hit by explosions in the Strait of Hormuz yesterday after ignoring its warnings, Reuters reported.

“An improvement in regional flows would allow more of the geopolitical premium to unwind, although continued disruptions leave the market vulnerable to renewed upside,” ING Bank’s analysts added.

Downward pressure:

Brent’s gains have been capped by a rise in US crude and fuel oil stocks.

Commercial US crude oil inventories rose by 4.7 million bbls to 414.4 million bbls in the week ending 6 November, according to the US Energy Information Administration (EIA).

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent’s price.

By Aparupa Mazumder

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