Oil traded mixed on Wednesday as hopes for a US-Iran de-escalation over the Strait of Hormuz offset a surprise build in US crude inventories. Brent settled up near $79 a barrel while WTI slipped to around $75. Houthi attacks on a Saudi tanker kept a floor under prices even as wire reports pointed to a possible Hormuz reopening announcement by Friday.
Traders split oil prices on Wednesday, weighing revived hopes for a US-Iran de-escalation over the Strait of Hormuz against a surprise build in US crude stocks, with Brent edging higher and WTI slipping.
Iran and Oman Near an Understanding on the Strait
Iran's Foreign Ministry pushed back on characterizations of formal peace talks but confirmed Iran and Oman have reached an understanding on managing the strait, with a joint announcement said to be in its final stages. Trump described Tuesday's talks with Iran as an "all-day negotiation", while also warning Tehran would be hit hard if no deal is reached.
Analysts remained cautious on how durable any arrangement might prove. Phil Flynn of Price Futures Group noted that similar agreements in the past have not held for long. IG analysts flagged doubts over how much control Iran would retain. Before the conflict began at the end of February, roughly a fifth of the world's oil and liquefied natural gas moved through the waterway. That is why geopolitical risk there still moves the market.
Brent Holds Near $79 as WTI Retreats
Brent crude settled up near $79 a barrel, a modest gain on the session. West Texas Intermediate, by contrast, fell to around $75, down roughly 0.7%. The moves followed a sharp selloff a day earlier, when reports of progress in ending the conflict drove prices down by around 5%, pulling Brent below $80 for the first time since mid-July.
Wire Reports Point to a Friday Deadline
Later reports pointed to a deal nearing finalization. The Wall Street Journal reported that a confirmed arrangement would see the US and Iran resume talks covering Iran's nuclear programme and financial relief. CNN cited a Gulf official putting the odds of a US-Iran deal by Friday at roughly even. The Financial Times reported that Iran would send vessels through the strait to clear mines before it reopens. N12 reported that an announcement could come as early as that evening, citing senior US and mediating-country officials.
Houthi Attacks and a Crude Build Cap Losses
Losses were capped by renewed shipping risk in the Red Sea: Houthi rebels said they attacked a Saudi oil tanker off the Yanbu export terminal, vowing to escalate further strikes. The Caspian Pipeline Consortium, the main export route for Kazakh crude oil, added to the strain. It repeatedly suspended loadings this week, citing safety concerns and a shortage of tankers.
On the supply side, US crude inventories rose by around 2.5 million barrels last week, confounding expectations for a draw of roughly 1.5 million barrels. Cushing, Oklahoma stockpiles also climbed more than expected, according to Andrew Lipow of Lipow Oil Associates, adding further pressure to WTI.
Source: Investinglive
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