Brent slips as US crude inventories rise

The front-month ICE Brent contract has declined by $1.16/bbl on the day, to trade at $77.54/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent has received some support as tensions between the US and Iran continued to escalate, with the US launching fresh strikes on Iran to keep the Strait of Hormuz open to shipping. The latest military action prompted Iranian retaliatory attacks on Kuwait and Bahrain.

“Fresh US strikes on Iran pushed oil higher this morning, with the latest escalation undermining confidence in the fragile ceasefire,” two analysts from ING Bank said.

Separately, Russia, on Wednesday, banned diesel exports through the end of July to stabilise its domestic fuel market after Ukrainian drone attacks on refineries triggered fuel shortages and sharp price increases, according to Reuters.

“Adding to supply concerns in the oil market, and specifically in middle distillates, Russia announced a ban on the export of diesel until the end of July,” ING Bank analysts added.

Downward pressure:

After a rapid increase in Brent yesterday, the price increase has slowed down and reversed slightly.

Market participants have also likely started assessing the impact of the fresh US strikes on Iran, which has weighed on market sentiment.

Brent came under some downward pressure after the US Energy Information Administration (EIA) released its latest weekly oil inventory data.

US commercial crude oil inventories rose by 3 million bbls to 411.4 million bbls in the week ending 3 July, according to the EIA.

By Tuhin Roy

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