Oil Prices Are Rising on Global Markets: Key Factors
11 August 14:38
Oil prices rose slightly on Tuesday, August 11, following a strong rally the previous day, according to "Komersant Ukrainian", citing Interfax-Ukraine.
October Brent futures on the London-based ICE Futures exchange are trading at $87.84 per barrel, which is $0.12 (0.14%) higher than the previous session’s closing price. On Monday, these contracts rose by $4.17 (4.99%) to $87.72 per barrel.
WTI crude oil futures for September delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have risen by $0.2 (0.24%) to $82.33 per barrel. Their previous price had risen by $3.95 (5.05%) to $82.13 per barrel.
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The situation in the Middle East remains the key factor for the oil market. The prospects for resolving the conflict between the U.S. and Iran and restoring unimpeded tanker traffic through the Strait of Hormuz remain unclear, as before.
Last weekend, Iran announced that it had reached the final stage of negotiations with Oman on a system for managing shipping traffic through the Strait of Hormuz, but is demanding that the U.S. meet a number of conditions before lifting the blockade. Among these conditions is the payment of compensation for damage caused to Iranian infrastructure as a result of U.S. strikes.
U.S. President Donald Trump responded to this statement by presenting Tehran with corresponding demands for compensation, specifically for all those who suffered as a result of Iranian attacks. The White House chief stated that he is still considering the possibility of a military solution regarding Iran.
KCM Trade analyst Tim Waterer noted that some of the optimism that had built up last week has faded, and this is giving oil prices a clear upward momentum.
Meanwhile, Saudi Aramco has postponed the launch of its Jazan oil refinery until August 30. On Sunday, the Iran-backed Houthis reported that they had carried out strikes on the facility.
“The risk of shipping disruptions in the Strait of Hormuz and the Bab el-Mandeb Strait remains extremely high,” said Waterer.
In addition, the threat of new incidents is keeping insurance costs high and forcing ships to take longer routes, the expert noted. He expects energy supplies from the region to remain limited in the near term.
Barclays analysts wrote on Monday that net shipments of crude oil and petroleum products through the Strait of Hormuz for the week ending August 7 averaged 3 million barrels per day, up from 4.4 million barrels per day the previous week.
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