Oil rose for a third day on pessimism over the prospects of the US and Iran reaching a peace deal and as fresh fighting flared up in the Middle East.
Brent climbed toward $97 a barrel, while West Texas Intermediate was near $95 after adding more than 7 per cent in the week’s first two sessions. US forces intercepted Iranian ballistic missiles and drones aimed at neighbouring Middle East countries and struck a command centre in the Islamic Republic in response.
That came after US president Donald Trump said he’s still optimistic the US can reach an interim peace deal with Tehran soon — disputing reports in Iranian state media that discussions with Washington had been suspended over the fighting in Lebanon. Another round of talks between Israel and Lebanon is scheduled for Wednesday.
The lack of clarity over the potential extension of the current ceasefire — and the future of flows through the Strait of Hormuz — has buffeted oil prices, which fell last month on optimism that a deal could be reached. The delay in a resolution is raising concerns that the world will need to tap crude inventories further as it waits for Persian Gulf exports to fully resume.
“The gap between the US and Iran suggests any deal that leads to a normalisation in flows is still some way off,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. “Risks are skewed to the upside, particularly as we approach the third quarter, a period of seasonally stronger demand.”
Iran fired ballistic missiles at Kuwait and Bahrain — which broke apart en route or were downed by air defences, US Central Command said in a post on X. American forces also conducted strikes on the Islamic Republic’s Qeshm Island, it said in a separate post.
Trump wants Iran to put specific nuclear concessions in writing as part of a preliminary agreement to end the war, ABC News reported, citing people familiar with the matter. Tehran had earlier given verbal assurances that it would agree to certain terms related to its nuclear programme, according to the report.
Price volatility has forced dealers to scale back their risk exposure, pushing open interest — the total number of futures contracts that haven’t been closed, liquidated or delivered — in global benchmark Brent to the lowest since August.
“Clients are tired,” Goldman Sachs Group co-head of global commodities research Daan Struyven said on Bloomberg TV. “It’s a challenging trading environment with headlines moving prices up and down. Positioning in oil markets is significantly more limited.”
Meanwhile in the US, an industry report showed crude stockpiles fell 6.8 million barrels last week. That would be the sixth straight drawdown if confirmed by official data due later Wednesday. - Bloomberg
