SINGAPORE: Oil prices increased by more than $1 on Thursday due to stalled peace talks between Iran and the US, as well as trade restrictions through the Strait of Hormuz. Brent crude futures increased by $1.26, or 1.2 percent, to $103.17 a barrel at 9:30 a.m. Saudi time, after surpassing $100 for the first time in over two weeks on Wednesday. West Texas Intermediate futures were up $1.20, or 1.3 percent, to $94.16.
Both benchmarks closed nearly $3 higher on Wednesday due to greater-than-expected gasoline and distillate stock draws in the US, as well as a lack of movement in Iran peace talks. The oil market is repricing expectations with little sign of progress in finding a resolution in the Persian Gulf,” wrote ING analysts in a note. However, prospects for a resolution are diminishing as peace talks stall.
“In addition, Iran’s seizure of two vessels attempting to transit the Strait of Hormuz suggests disruptions to shipments are set to continue.” Despite a ceasefire request from Pakistani mediators, Iran and the US continue to block ship transit in the strait, which used to transport 20% of global oil supply before the war began on February 28.
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