Brent steady as Middle East tensions stay afloat
The front-month ICE Brent contract has inched $0.09/bbl lower on the day, to trade at $107.89/bbl at 09.00 GMT.
IMAGE: Oil storage facility. Getty Images
Upward pressure:
Brent crude’s price has remained largely steady, continuing to trade above the $107/bbl threshold, as the conflict in the Middle East persists.
What started as a US-Iran confrontation, has rapidly metastasized into a regional crisis, prompted by the escalation between Yemen’s Iran-aligned Houthi militants and Saudi Arabia.
The Houthis have targeted Saudi Arabia’s military facilities and infrastructure this week, after hitting Riyadh’s crucial 1,200 km East-West Pipeline, a favourable alternative to export crude through the Red Sea terminal at Yanbu, to circumvent the Strait of Hormuz.
“Oil prices remain firmly supported, with that floor unlikely to give way until markets get clearer visibility on Saudi supply after the East–West pipeline shutdown,” two analysts from ING Bank noted.
Downward pressure:
While there are no major downward pressures acting on Brent’s price today, market analysts will keep an eye out for US crude stocks data scheduled for release later this week.
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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