Brent ticks up following US strikes in Iran
The front-month ICE Brent contract has gained by $1.16/bbl on the day, to trade at $99.67/bbl at 09.00 GMT.
IMAGE: Oil storage facility. Getty Images
Upward pressure:
Brent’s price has moved slightly higher in the previous session on the back of mounting concerns of a prolonged US-Iran conflict.
Yesterday, US Central Command (CENTCOM) spokesperson Tim Hawkins said the US military struck missile sites in southern Iran.
The news comes at a time when both sides are widely expected to reach a peace deal, ultimately reopening the Strait of Hormuz to commercial vessel traffic and easing pressure on oil prices.
“Targets included missile launch sites and Iranian boats attempting to emplace mines,” Hawkins said.
Market analysts predict that renewed military escalation will drive prices up again, keeping the market fixated on Middle East tensions until navigation through the Strait of Hormuz is fully restored.
“The entire global maritime system rests on a surprisingly fragile network of narrow corridors [such as the Strait of Hormuz] acting as the hidden circulatory system of the world economy,” SPI Asset Management managing partner Stephen Innes remarked.
Downward pressure:
Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.
The total number of rigs drilling for crude oil in the US rose by 10 to 425 units last week.
The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.
By Aparupa Mazumder
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