Oil gains 2% as US-Iran peace talks stall
USO•Oil prices rose about 2% after U.S. President Donald Trump rejected Iran’s peace proposal, though he expected more talks this week. Brent was up 1.6% at $106 a barrel and U.S. WTI gained 1.8% to $94.10.
1. Prices rise on stalled talks
Oil prices rose about 2% on Monday after Trump rejected Iran’s proposal to resolve their conflict and reopen the Strait of Hormuz. He said he expected U.S. negotiators to engage in more talks this week, while mediators were expected to hold separate talks with the U.S. and Iran on Monday or Tuesday.
2. Exports and supply concerns
Brent futures were up $1.68, or 1.6%, at $106 a barrel by 1320 GMT, after reaching their highest level since September 15 earlier in the session. U.S. West Texas Intermediate crude rose $1.69, or 1.8%, to $94.10. Middle East crude exports rebounded to 12.8 million barrels per day in September, the highest since the war began in February, while shipments through the Strait of Hormuz were set to reach about 7.4 million barrels per day.
3. Other market factors
A Saudi-led coalition said it intercepted two ballistic missiles and two drones launched by the Houthis toward Saudi Arabia. UBS analyst Giovanni Staunovo said Hormuz flows remained below pre-conflict levels despite increased vessel traffic, keeping the market undersupplied. Last week Brent rose 0.4%, while WTI fell more than 7% amid concerns about a possible U.S. diesel export ban.
