Oil prices remained higher for a second consecutive session on Tuesday, although earlier gains moderated as investors weighed uncertainty surrounding US-Iran negotiations against an increase in crude exports from the Middle East.
At 04:48 ET (08:48 GMT), Brent crude futures were up 0.1% at $105.38 a barrel, while US West Texas Intermediate futures also increased 0.1% to $92.77.
Brent had traded close to $109 a barrel during the previous session before ending at approximately $105.
Elevated crude prices have contributed to concerns about inflation and monetary policy, with higher energy costs being assessed alongside the recent increase in government bond yields.
“Geopolitical headlines and upward pressure on energy prices provide rates with an excuse to push higher,” ING analysts said in a note.
US-Iran Discussions Remain in Focus
Qatari mediators were expected to hold separate talks with Iran’s foreign minister and US officials over a revised seven-day proposal submitted by Iran the previous week, Reuters reported, citing sources.
Both sides remained pessimistic about reaching an agreement before the US midterm elections, according to the report.
The diplomatic uncertainty has maintained attention on the potential for further disruption to Middle Eastern oil supplies. However, regional crude exports have recently increased.
Regional Crude Exports Reach Highest Level Since February
Exports from major Middle Eastern oil producers rose to 12.8 million barrels per day in September, the highest level recorded since February, according to preliminary Kpler data.
Saudi Arabia and the United Arab Emirates accounted for a large proportion of the increase.
Saudi crude exports through the Strait of Hormuz were expected to rise during the month after shipments had previously been diverted from the Red Sea port of Yanbu because of damage to the country’s east-west pipeline.
The pipeline has since been repaired, allowing Saudi Arabia to resume exports from Yanbu and restore a route that bypasses the Strait of Hormuz.
The infrastructure can transport as much as 7 million barrels of crude per day. Around 3.5 million barrels per day were moving through the pipeline following its restart, the Wall Street Journal reported.
Diesel Markets Affected by Supply Disruptions
The recovery in crude exports has not fully addressed concerns surrounding the cost and logistical difficulties of transporting oil around the Gulf.
Refined-product markets have also been affected by the disruption.
Reuters reported that record diesel prices have prompted the White House to consider regulatory changes that could expand sales of red-dyed diesel.
Meanwhile, speculation about possible restrictions on US diesel exports has contributed to a wider spread between Brent and WTI crude prices.
Oil markets are continuing to assess the progress of US-Iran negotiations alongside Middle Eastern export volumes and regional transportation conditions.
Leave a Reply