Brent shoots up again as diplomatic channels falter

The front-month ICE Brent contract has gained by $6.34/bbl on the day, to trade at $105.77/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent crude’s price has reversed course, surpassing the $105/bbl mark, as hopes of a diplomatic breakthrough took a backseat at the United Nations General Assembly summit.

US President Donald Trump threatened Iran with “annihilation” during his speech at the summit, while Iranian President Masoud Pezeshkian retaliated to Trump’s remarks by stating that Tehran will not bow down to the US’ “bullying mentality.”

Oil prices continue to find steady support amid these latest developments, as a swift end to the Middle East conflict remains unlikely, market analysts noted.

Oil prices remain more than 60% higher year-to-date, as ongoing disruption in the Middle East continue to strain the global oil market, two analysts from ING Bank noted.

Downward pressure:

Brent crude’s price has felt some downward pressure after the US Energy Information Administration (EIA) reported a rise in US crude stocks.

Commercial US crude oil inventories increased by around 3 million bbls, to 426.4 million bbls, in the week ending 18 September, according to data from the EIA.

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

By Aparupa Mazumder

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