Brent gains as US-Iran negotiations falter
The front-month ICE Brent contract has increased by $5.22/bbl on the day, to trade at $98.48/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent's price has risen as renewed hostilities in the Middle East and a lack of progress in talks between Tehran and Washington continue to support the market
Iran launched ballistic missiles towards neighbours Kuwait and Bahrain, while US forces carried out strikes on Iran's Qeshm Island, Reuters reported.
“US, Iran exchange missile and drone strikes in Persian Gulf,” remarked VANDA Insights founder Vandana Hari.
Market sentiment is also buoyed by concerns that diplomatic efforts between the two countries are faltering.
“Crude oil edged higher as peace talks between the US and Iran struggled to stay on track,” ANZ Bank senior commodity strategist Daniel Hynes noted.
Meanwhile, US crude oil inventories fell by a larger-than-anticipated 6.8 million bbls in the week ending 29 May, according to estimates from the American Petroleum Institute (API) cited by Trading Economics.
The decline was significantly steeper than analysts’ expectations for a 3.6 million-bbl draw. Lower US crude inventories can signal stronger demand and may provide additional upward support to Brent futures.
Downward pressure:
Despite the lack of any meaningful breakthrough in US-Iran talks, market participants continue to closely monitor the negotiations for signs of progress, a factor that has exerted some downward pressure on Brent's price.
By Tuhin Roy
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