Brent moves lower on US stocks build

The front-month ICE Brent contract has declined by $1.24/bbl on the day, to trade at $102.89/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude has remained firm as the Middle East conflict enters its third week with no signs of easing.

Oil flows through the Strait of Hormuz remain tightly constrained, even as Iran gave permission to limited tanker transits.

“With no sign of de-escalation in the Middle East, Brent crude appears to have found a floor just above $100/bbl,” two analysts from ING Bank noted.

Meanwhile, the Israel Defense Forces (IDF) has claimed to eradicate Iran’s security chief Ali Larijani. The news has raised market concerns of an Iranian retaliation that could disrupt supply and send oil prices higher.

“Confirmation of the death of Iran’s security chief, Ali Larijani, only increases uncertainty for markets. It’s unlikely to lead to de-escalation,” ING Bank’s analysts added.

Downward pressure:

Brent’s price moved lower following a surprise build in US crude stocks.

US crude oil inventories rose by 6.6 million bbls in the week ending 13 March, according to estimates from the American Petroleum Institute (API).

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

The US Federal Reserve (Fed) will hold its Federal Open Market Committee (FOMC) meeting later today to discuss the prospects of interest rate cuts in the US – amid the ongoing war.

Notably, higher interest rates in the US can dampen demand growth and make dollar-denominated commodities, like oil, more expensive for holders of other currencies.

By Aparupa Mazumder

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