Brent surpasses $90/bbl threshold as US-Iran peace accord expires

The front-month ICE Brent contract has gained by $1.71/bbl on the day, to trade at $90.92/bbl at 09.00 GMT.

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Upward pressure:

Brent crude’s price has moved higher, following the expiration of the 60-day US-Iran peace accord signed on 17 June.

“Talks appear to be at a standstill, as the 60-day truce expired on Monday,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Washington has decided to not extend the ceasefire, while Tehran is prepared to launch a “full offensive” policy against the US, as negotiations failed to reach a positive outcome.

“Oil prices remained supported by rising geopolitical risks and supply concerns,” 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 that will be out later this week.

Last week, the US Energy Information Administration (EIA) reported a massive 17.4 million bbls build in commercial US crude oil inventories, in the week ending 7 August.

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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