Shafaq News
Oil prices edged up on Thursday, paring some previous lossesas investors monitored peace talks between the U.S. and Iran, while supplytightness and U.S. inventory drawdowns provided some support.
Brent crude futures rose 78 cents, or 0.74%, to $105.80 abarrel by 0341 GMT, and U.S. West Texas Intermediate futures were up 84 cents,or 0.85%, at $99.10.
Both benchmarks dropped more than 5.6% on Wednesday to anover one-week low after U.S. President Donald Trump said negotiations with Iranwere in the final stages, but also threatened further attacks if Tehran did notagree to a peace deal.
"The oil market remains overly sensitive toIran-related headlines, with participants continuing to pin considerable hopeon reports that talks between the U.S. and Iran are progressing," INGanalysts said in a note on Thursday.
"We’ve been in this situation multiple times before,which ultimately led to disappointment," they added, forecasting the Brentprice would average $104 per barrel in the current quarter.
Iran warned against further attacks and announced stepsentrenching its control of the crucial Strait of Hormuz, which before the warcarried oil and liquefied natural gas shipments equal to about 20% of globalconsumption but has been mostly closed.
On Wednesday, Iran announced a new "Persian Gulf StraitAuthority," saying there would be a "controlled maritime zone"in the Strait of Hormuz.
Iran effectively closedthe strait in response to the U.S. and Israeli attacks that started the war onFebruary 28. Most of the fighting has stopped since an April ceasefire, butwhile Iran is limiting traffic through Hormuz, the U.S. has blockaded itscoastline.
The supply losses from the key Middle Eastern region becauseof the war have forced countries to pull from their commercial and strategicinventories at a rapidrate, raising concerns about draining them.
The U.S. Energy Information Administration said on Wednesdaythe country withdrew nearly 10 million barrels of oil from its StrategicPetroleum Reserve last week, the biggest drawdown on record.
Underlining the impact of the supply disruptions in the Middle East was EIA datashowing a bigger-than-expected decline in U.S. crude oil inventories last week.
"The drawdown in oil inventories will make it difficultfor oil prices to remain low," said Mingyu Gao, chief researcher forenergy and chemicals at China Futures.
"With the Strait of Hormuz blocked, globalrefined-product and onshore crude inventories are expected to fall below theirlowest levels for this time of year in the past five years by late May and lateJune," Gao said.
(Reuters)
Only the headline is edited by Shafaq News Agency.
