Brent inches lower as Qatar presents Iran with new peace deal

The front-month ICE Brent contract has lost by $0.20/bbl on the day, to trade at $115.48/bbl at 09.00 GMT.

IMAGE: An oil pumpjack. Getty Images

Upward pressure:

Brent crude’s price has found support after Yemen’s Houthi militants claimed an attack on one of the biggest oil refineries in Saudi Arabia and US crude stocks declined.

The Iran-aligned Houthis claimed to hit the 550,000 b/d Ras Tanura refinery complex with a ballistic missile. Saudi Arabian authorities have not confirmed the strike.

Besides, US crude oil inventories fell by 2.03 million bbls in the week ending 23 October, according to estimates from the American Petroleum Institute (API).

A decline in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.

Brent futures' gains in recent weeks suggest the market is pricing in “a greater likelihood of re-escalation,” two analysts from ING Bank said.

Downward pressure:

Brent’s price has come under some downward pressure amid fresh diplomatic efforts to end the Middle East conflict.

Qatari mediators presented Iran with a new draft deal to end the war, and Tehran is expected to respond by the end of this week, Reuters reported, citing an official briefed on the negotiations.

The draft deal sets a seven-day timeline of daily confidence-building steps for both sides, the report added.

If the market gets past the US midterm elections on 3 November without renewed strikes on Iran, its risk premium could start to erode, ING Bank’s analysts said.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online