Oil rises as supply disruption persists
Oil rose on Tuesday as the world’s biggest supply disruption persisted and as Iran denied it had talks with the US to end the war in the Gulf, contradicting US President Donald Trump who said a deal could be reached soon.
Crude futures had dropped more than 10 percent on Monday, after Trump ordered a five-day delay to attacks on Iran’s power plants, saying the US had talks with unnamed Iranian officials that produced “major points of agreement”.
For all latest news, follow The Daily Star's Google News channel. Brent futures rose $1.83, or 1.8 percent, to $101.77 a barrel at 1130 GMT. US West Texas Intermediate (WTI) climbed $2.21, or 2.5 percent, to $90.34.
The war has all but halted shipments of about one-fifth of the world’s oil and liquefied natural gas through the Strait of Hormuz, causing what the International Energy Agency has called the biggest-ever oil supply disruption.
“The reality on the ground is unchanged,” said Nikos Tzabouras, analyst at Jefferies-owned Tradu.com. “The Strait of Hormuz remains effectively closed and supply disruptions linger, tightening the market.”
Iran on Tuesday sent waves of missiles into Israel. Three senior Israeli officials, speaking on condition of anonymity, said Trump appeared determined to reach a deal, but that they thought it highly unlikely that Iran would agree to US demands in any new round of negotiations.
“The Iran conflict sees tentative de-escalation, but unresolved risks remain around Hormuz,” BCA Research said in a report. “Given continued attack risks and headline volatility, it remains too early to position aggressively for lower oil prices.”
If the strait remains effectively shut until the end of April, Brent could still reach $150 a barrel, Macquarie said. That would exceed the all-time high of $147 set in 2008.
In the latest attacks on energy infrastructure across the region, a gas company office and a pressure-reduction station were hit in the Iranian city of Isfahan, while a projectile struck a gas pipeline feeding a power station in Khorramshahr, Iran’s Fars news agency reported.
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