Oil rises on mixed signals over Iran war outlook

Résumé détaillé

US says it is unlikely to strike Iran, but Tehran has vowed not to give up nuclear material. Read more at straitstimes.com.

The Iran war, which started on Feb 28, has caused gas prices to rise worldwide.

Oil climbed on Nov 11, as traders weighed mixed signals on the prospects for a conclusion to the Iran war.

While US President Donald Trump has said further strikes on Iran would not be necessary, regional flare-ups have persisted and peace talks have shown little progress. Iran will not remove “a single atom” of enriched nuclear material from the country, Secretary of the Supreme National Security Council Mohsen Rezaee said in an interview with Al Mayadeen.

West Texas Intermediate futures rose above US$86 a barrel after sliding about 5% in the previous two days, while Brent closed near US$93.

“We’ve shifted from a market that needed things to get worse to move higher, to one where things simply not getting better could be enough to push prices up,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.

The US benchmark is up roughly 50% this year, but the market has reversed sharply in November, with Brent tumbling from a six-month high on hopes the conflict will ease and as Persian Gulf energy exports rise. Saudi Arabia’s crude output climbed 26% in October to the highest since the war began despite attacks on ships, as a recovery in regional flows pushes prices lower.

Saudi Arabia told OPEC that its output rose to 10.56 million barrels a day in October, according to a monthly report seen by Bloomberg from the organisation’s secretariat. The bigger flows from the Saudis and other exporters around the Persian Gulf are showing up in physical markets at a time when consumption remains constrained.

“We have seen a sharp re-pricing of the oil market over the past two weeks” as election results in the US and Israel “reduced the likelihood of renewed escalation in the conflict,” said Jens Naervig Pedersen, a strategist at Danske Bank AS. Still, “Iran seems hesitant to meet US demands on its nuclear programme, which may test the durability of the recent decline in oil prices.”

Meanwhile…

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