Oil prices steadied on Wednesday near the previous session’s two-month lows, as traders weighed hopes for a de-escalation in the US-Israeli war with Iran against concerns about continued attacks on shipping in the Strait of Hormuz.
Brent futures were up 19 cents, or 0.2%, to $91.68 a barrel at 0911 GMT. US West Texas Intermediate crude was down 6 cents, or 0.1%, at $85.98.
There is little sign of attacks in the Strait of Hormuz easing after 37 ships were attacked in October, the highest monthly total since the start of the war, according to data from the Washington Institute for Near East Policy.
“There has been an increase of vessel attacks in the Gulf
shipping lanes amidst uncertainty of the diplomacy talks,” said
June Goh, senior analyst at Sparta Commodities.
“With the US midterms well over and more crude flows out of
the Middle East, there seems to be more bearish tones to the oil
price.”
She added that the key driver for the market was whether
Iran would engage with US demands to reach a diplomatic
agreement.
A tanker was struck northeast of Lima in Oman, the United
Kingdom Maritime Trade Operations agency said on Tuesday. Iran’s
Revolutionary Guards Navy said separately on Tuesday that two
tankers caught fire after hitting naval mines on an
“unauthorized route” in the strait.
“Even in the event a deal is struck, an increase in flows
through the waterway would still depend on mine clearance,
insurance costs and whether or not shipowners would even be
willing to take the risk,” LSEG Oil Research said in a November
10 note.
In the previous session, oil prices initially fell by more
than $3 a barrel after US officials played down the need for
further military strikes against Iran. Prices later pared some
losses after an Iranian security official said no talks were
taking place between the two sides.
On the supply side, US crude stocks rose by 9 million
barrels in the latest week, market sources said, citing data
from the American Petroleum Institute. Official data is due
later on Wednesday.
Separately, a regional governor said a drone attack caused a
fire in the port area of Ust-Luga on Russia’s Baltic coast,
injuring three workers.
Russian oil refining capacity has been reduced by about 30%
since late October following renewed Ukrainian drone attacks,
industry sources said.
Russian and Ukrainian officials met in Abu Dhabi on Tuesday
for their first peace talks since February as envoys for US
President Donald Trump launched a fresh push to end the war.
Source: Khaleej Times