Brent falls as IEA plans to release more oil

The front-month ICE Brent contract has dropped by $1.28/bbl on the day, to trade at $110.13/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Iran’s President Masoud Pezeshkian, discussed with Pakistan’s army chief, mediation efforts to resolve the Middle East crisis in Tehran on Tuesday, but took a hard line, saying there would be no talks with Washington until its demands to reopen the Strait of Hormuz were met, according to media reports.

Brent continues to trade above $110/bbl as security risks persist for vessels passing through the strait. Ship-tracking firm Kpler reported on Monday that at least 18 vessels had been attacked in the region over the past two weeks.

“While Persian Gulf oil flows improved in the second week of October, the recovery looks under threat amid the increased attacks, with preliminary data pointing to another slowdown,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

US crude oil stocks dropped by 4.93 million bbls in the week ending 16 October, according to estimates from the American Petroleum Institute (API), as cited by Trading Economics. A decline in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.

Downward pressure:

The International Energy Agency (IEA) is prepared to coordinate further releases of oil from emergency stocks with its member countries, Reuters reported, citing IEA executive director Fatih Birol.

The agency announced last week that its member countries had collectively released about 330 million bbls of crude oil and petroleum products from strategic reserves so far, amid the ongoing conflict in the Middle East.

By Shilpa Sharma

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