Brent poised to end the week above $90/bbl mark

The front-month ICE Brent contract has moved $0.76/bbl lower on the day, to trade at $92.91/bbl at 09.00 GMT.

IMAGE: Crude oil storage facility. Getty Images

Upward pressure:

Brent’s price is poised to end the week higher than it began, amid continued growing hostilities in the Middle East, between the US and Iran.

Washington has vowed to drag the war, with President Donald Trump announcing sweeping economic sanctions on Iran and its allies.

Countries providing any type of financial support to Iran will “face TREMENDOUS Economic Consequences”, Trump said in a post on social media platform Truth Social.

Meanwhile, commercial vessels transiting the region have continued to come under drone assaults.

A merchant ship travelling west in the Gulf of Aden, about 36 nautical miles east of Al Mukalla, Yemen, was hijacked yesterday, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

“The tanker has been boarded by six armed persons who are now in control of the vessel and redirecting to Somalia,” the UKMTO said.

Downward pressure:

While there is no new downward pressure acting on Brent, its price rally was capped after the US Energy Information Administration (EIA) reported a surprise rise in US crude stocks yesterday.

Commercial US crude oil inventories increased by 4.4 million bbls to 429 million bbls in the week ending 14 August, according to data from the EIA.

“This [EIA’s report] contrasted sharply with API's reported 328k barrel [328,000 bbls] draw and market expectations for a 74k barrel decline,” two analysts from ING Bank noted.

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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