Brent crude surges as ceasefire hopes fade again

The front-month ICE Brent contract has gained by $5.51/bbl on the day, to trade at $94.29/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent crude’s price has gained by more than $5/bbl, as hopes of a temporary US-Iran ceasefire have faded after US President Donald Trump ruled out any chances of immediate talks.

The US Central Command (CENTCOM) has conducted the 11th consecutive day of strikes against Iran, targeting Tehran’s maritime capabilities, aircraft hangars, drone storage facilities and logistics infrastructure, it said.

“Oil prices pushed higher again yesterday amid mounting supply risks as hopes fade for a temporary ceasefire between the US and Iran,” two analysts from ING Bank noted.

Additionally, Yemen’s Iran-backed Houthi militants imposed a maritime embargo on vessels carrying Saudi Arabian crude through the Bab al-Mandeb Strait into the Red Sea.

Three Saudi oil tankers reversed course in the Red Sea following the Houthi announcement, Reuters reported.

“The Houthis' announced maritime blockade on Saudi Arabia has shippers nervous, with several tankers moving to avoid the Bab el-Mandeb Strait,” ING Bank’s analysts added.

Downward pressure:

Brent’s price felt some downward pressure following an unexpected increase in US crude stocks.

US crude oil inventories increased by 2.6 million bbls in the week ending 17 July, according to estimates from the American Petroleum Institute (API).

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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