Brent poised to end week above $100/bbl

The front-month ICE Brent contract has gained by $2.29/bbl on the day, to trade at $106.29/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude’s price continues to trade north amid sustained geopolitical escalation in the Middle East.

Yesterday, Iran’s Revolutionary Guard Corps (IRGC) seized two container ships – the Panama-flagged MSC Francesca and the Liberia-flagged Epaminondas – while firing gunshots at a third vessel in the Strait of Hormuz.

The news has put upward pressure on Brent’s price, breaking well above $100/bbl once again, according to market analysts.

“The IRGC escorted the seized ships toward the Iranian coast, again terrorizing this vital chokepoint that carries a significant portion of the world’s oil and LNG flows,” Price Futures Group’s senior market analyst Phil Flynn said.

Downward pressure:

Commercial US crude oil inventories increased by 1.9 million bbls to about 466 million bbls in the week ending 17 April, according to data from the US Energy Information Administration (EIA).

“That’s [EIA figures] still about 3% above the five-year average for this time of year — keeping the crude market well-supplied and balanced,” Flynn said.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

Meanwhile, a ceasefire extension between Israel and Lebanon has also capped some of Brent’s price gains today.

By Aparupa Mazumder

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