Brent loses momentum following surprise US stocks build

The front-month ICE Brent contract has declined by $4.24/bbl on the day, to trade at $85.90/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude’s price has felt some upward pressure amid the escalating conflict between US and Iran.

China has formally dismissed Washington’s economic campaign against Iran, calling it “illicit and unilateral.”

The US, yesterday, announced nearly 60 Iran-related sanctions and threatened imposing secondary sanctions on international allies who continue trading with Iran.  

By threatening secondary penalties on any nation continuing to trade with Tehran, these sweeping sanctions pull Beijing directly into the US-Iran economic crossfire.

Downward pressure:

Brent crude’s price has plunged below $90/bbl mark after the American Petroleum Institute (API) reported a surprise build in US crude stocks.

Commercial US crude oil inventories increased by 4.2 million bbls in the week ending 21 August, according to API estimates.

The increase was well above market expectations for a 1.9 million-bbl build.

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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