Shafaq News
Oil pricesedged higher on Tuesday, though gains were capped as traders looked beyondeasing geopolitical tensions in the Middle East and turned their attention tosupply increases and demand prospects.
Brent crudefutures gained 38 cents, or 0.5%, to $72.37 a barrel, while U.S. West TexasIntermediate crude rose 30 cents, or 0.4%, to $68.85 a barrel as of 0350 GMT,after settling down at around pre-Iran war levels on Monday.
"The stepstowards recovery in supply have eased the immediate risk premium, but themarket remains wary of putting too much faith in the stability of the currenttruce given the on again-off again nature of U.S.-Iranrelations," said Tim Waterer, chief market analyst at KCM Trade.
"We willbe watching for early signs of demand response, particularly from China. Themarket has priced in a lot of the positive supply news, so the next leg in oilprices will depend on whether physical reality matches the optimisticheadlines."
PresidentDonald Trump said on Monday the U.S. would either reach a deal with Iran or"finish the job," renewing his threat of military action as Tehranprojects defiance following the funeral of former Supreme Leader Ayatollah AliKhamenei.
Investors havebeen keeping a close eye on talks between the U.S. and Iran over the fate ofshipping through the Strait of Hormuz while tracking the recovery in Gulf oilexports.
On Mondaynight, Iran's Revolutionary Guards fired at least two missiles at commercialships transiting the Strait of Hormuz, Axios reported, citing two U.S.officials. The commercial ships suffered significant damage buthad no casualties, the report said.
On Tuesday,Japanese-owned supertankers carrying Saudi Arabian crude were heading to theStrait of Hormuz to exit the Gulf, shipping data showed, joining a fleet ofpreviously stranded vessels that left a day earlier.
Despite therecent surge in strait activity, oil flow recovery is proving slower thanexpected, ANZ analysts said in a note.
"Theinitial rebound in tanker transits through the Strait of Hormuz has stalled,with vessel crossings remaining in single digits and no sustainedrecovery evident," they said.
"While theinterim U.S.-Iran agreement has reduced immediate geopolitical risks, shippingoperators remain cautious, limiting the speed at which crude exports can returnto normal levels."
Meanwhile, theUnited Arab Emirates raised crude output above 3.8 million barrels per day inJune, its highest since April 2020 and above pre-Iran war levels,after leaving OPEC+ production quotas in May, according to Reuters estimates.
TheOrganization of the Petroleum Exporting Countries and its allies includingRussia agreed on Sunday to further increase output targets by 188,000 bpd fromAugust, on top of similar increases for June and July.
Saudi Arabiacut the August official selling price (OSP) for its flagship Arab Light crudeto Asia to $1.50 a barrel below the Oman/Dubai average, an $11 cut from theprevious month and the biggest drop in more than two decades, according to aSaudi Aramco pricing statement on Monday.
(REUTERS)
Only theheadline is edited by Shafaq News Agency.
