Brent declines as markets await US next move in Middle East conflict
The front-month ICE Brent contract has lost by $2.89/bbl on the day, to trade at $103.53/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent crude’s price has found some support from an unexpected draw in US crude stocks and fresh clashes between the US and Iran.
US crude oil inventories fell by 5.3 million bbls in the week ending 30 October, according to estimates from the American Petroleum Institute (API).
A decline in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.
Besides, Washington has attacked an Iranian anti-aircraft facility on Qeshm Island near the Strait of Hormuz, ANZ Bank’s senior commodity strategist Daniel Hynes said.
Effective throughput of oil through the Strait of Hormuz has fallen to 56% of pre-conflict levels “and is trending lower,” Hynes added.
Downward pressure:
Brent’s price has come under downward pressure amid signs that the US is not planning an imminent return to major combat with Iran.
US President Donald Trump told the Financial Times yesterday that Washington had no immediate plans to strike Iran.
This week’s strikes on Qeshm Island appeared limited and did not signal a return to major combat operations, Reuters reported, citing a US official.
Trump’s comments came as his Republican Party lost control of both houses of Congress in yesterday’s US midterm elections – a vote the global oil market had been watching closely, after the US President threatened to resume strikes on Iran once it was over.
By Aparupa Mazumder
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