Oil Falls, Market Warns of Strait of Hormuz Risks
Oil prices fell in early trading today as a conditional ceasefire between Israel and Lebanon raised hopes for a US-Iran peace deal, although sporadic clashes continued. Brent futures traded down 2.2% at $95.85 per barrel, capping three days of gains, while WTI was at $90.32 per barrel in the European session on thin volume.
Despite the optimism, interim peace negotiations between Washington and Tehran appear to be stalled. Iran has emphasized that its agreement with the US regarding the Strait of Hormuz requires an effective ceasefire in Lebanon. Trump stated that the Strait of Hormuz would reopen “soon” if Iran signs a memorandum of understanding and certain areas are cleared of mines, although the threat to commercial shipping remains.
Global oil supplies remain tight. US data showed crude inventories at Cushing, Oklahoma, fell for the sixth consecutive week, approaching minimum operating levels. Analysts warn that Brent could rise as high as $130 per barrel in the fourth quarter if supply tightening continues.
Market sentiment is reflected in price volatility: prices rose at the start of the week as global reserves dwindled, then retreated after reports of a ceasefire. Ole Sloth Hansen of Saxo Bank noted that traders were “reluctant to maintain long positions amid expectations of a surge in supply from ships ready to sail,” indicating that concerns about geopolitical risks remain high.
The market now remains focused on the Strait of Hormuz, which normally carries a fifth of global crude oil supplies. The near-total closure of this waterway since the war began has pushed energy prices higher and raised concerns about inflation and an economic slowdown. Oil prices remain sensitive to diplomatic developments in the Middle East and military measures that could disrupt supply. (gn)*
Source: Newsmaker.id
