Brent declines amid Middle East de-escalation chatters
The front-month ICE Brent contract has lost by $3.01/bbl on the day, to trade at $98.80/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
Brent’s price has felt some upward pressure as concerns over supply disruptions persist.
Iranian drones targeted a fuel tank at Kuwait International Airport earlier today, causing a fire, Reuters reported citing Kuwait's Civil Aviation Authority.
The US Pentagon is preparing to deploy more military units to the Middle East, amid warnings of a possible escalation with Lebanon-based Hezbollah militant group.
Washington will deploy “around 2,000 troops from the 82nd Airborne Division to the region, underscoring the risk of further escalation,” two analysts from ING Bank said.
Downward pressure:
Brent crude’s price has declined past the $100/bbl mark after the American Petroleum Institute (API) reported a surge in US crude stocks.
US crude oil inventories rose by 2.3 bbls in the week ending 20 March, according to API estimates.
A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.
There is also news of some de-escalation in the Middle East, that has put downward pressure on Brent’s price today.
Washington has put forward a 15-point ceasefire plan to Iran that could open the door to a month-long truce, according to media reports.
“Oil prices fell sharply on reports of renewed ceasefire efforts, with Brent sinking as much as 7% toward $97/bbl,” ING Bank’s analysts noted.
Iran has notified the United Nations Security Council (UNSC) and the International Maritime Organization (IMO) that “non-hostile” vessels are allowed to transit the Strait of Hormuz.
“Iran also reiterated that foreign ships can transit the Strait of Hormuz only if they comply with Tehran’s regulations and are not supporting acts of aggression,” the two ING Analysts added.
By Aparupa Mazumder
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