Oil rises over $2 as investors assess Iran war future
USO•Brent crude rose $2.30, or 2.43%, to $96.92 a barrel, while U.S. West Texas Intermediate gained $2.15, or 2.44%, to $90.27. Investors reassessed the Iran war outlook as tanker incidents raised concerns about oil supplies.
1. Oil prices recover
Oil prices rose more than $2 a barrel on Thursday after both benchmarks fell more than 8% on Wednesday to their lowest settlement levels since August 31. UBS analyst Giovanni Staunovo said unresolved tensions in the Middle East were driving a modest recovery.
2. Tanker incidents worry market
At least five vessels have reported incidents in the Gulf since Sunday, according to UKMTO. Analysts said reports of tankers struck by mines or targeted by drones continued to worry the market, while shipments through the Strait of Hormuz had recovered close to pre-war levels at higher cost.
3. War outlook remains uncertain
Eurasia Group lowered its estimate of renewed U.S. strikes on Iran to 60% from 65%, cut the chance of a deal to 10% from 20%, and raised the likelihood of a continued standoff to 30% from 15%. It said escalation could push Brent to $110-$125 a barrel. Iran’s foreign minister discussed diplomatic efforts with Saudi and Qatari counterparts, while the Islamic Revolutionary Guard Corps said two oil tankers and a tugboat caught fire after attempting unauthorized routes through the Strait of Hormuz.
