Oil Prices Continued to Rise: The Main Reasons
10 July 14:38
Oil prices are rising slightly on Friday, July 10, following a decline the previous day; traders continue to monitor the situation in the Middle East. This is reported by "Komersant Ukrainian", citing “Interfax-Ukraine.”
September Brent futures on the London-based ICE Futures exchange are trading at $76.61 per barrel, which is $0.31 (0.41%) higher than the previous session’s closing price. On Thursday, they fell by $1.72 (2.2%) to $76.3 per barrel.
WTI crude oil futures for August delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have risen by $0.32 (0.44%) to $72.4 per barrel. At the close of the previous session, their price had fallen by $1.44 (2%) to $72.08 per barrel.
Brent contracts could end the week up about 6%, while WTI contracts could rise 5%, according to Reuters.
The U.S. and Iran exchanged blows after Iran fired on commercial vessels in the Strait of Hormuz.
Earlier this week, U.S. President Donald Trump stated that he considers the truce over and sees no point in continuing dialogue with Tehran. He later told reporters that following new U.S. strikes against Iran, Iranian officials had called him to request a deal.
CNN reported the day before, citing a U.S. source, that negotiators from Washington and Tehran continue to discuss technical issues related to resolving the conflict.
“The U.S. remains committed to finding a solution to the problem, and negotiations at the expert level are ongoing,” the network’s source said.
“Prices have pulled back from their midweek highs, but they still carry a significant risk premium; shipping traffic through the Strait of Hormuz has virtually come to a standstill, and there is no clear understanding of when it might resume,” wrote Vanda Insights founder Vandana Hari, adding that the potential for price growth is limited by the market’s confirmation that the U.S. and Iran have returned to diplomatic talks.
“Amid renewed U.S. attacks on military targets in Iran, Trump’s decision not to strike Iranian energy infrastructure brought some relief to the market,” noted analysts at ANZ Research.
“We believe that the escalation of tensions between the U.S. and Iran will be short-lived, as both countries are constrained in their actions by economic and political considerations,” according to an analytical note from Macquarie Group.
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