Brent crude rises to $88.02
After rising as high as $87.93 the previous day, Brent crude for October delivery ended the session at $87.72 per barrel. The price rose 0.34% from the previous close to reach $88.02 as of 9:15 a.m. today.
West Texas Intermediate crude for September delivery was also trading at around $82.50 per barrel at the same time.
US-Iran deal prospects and the Strait of Hormuz in focus
The weakening prospects for an agreement between the US and Iran to end the war and reopen the Strait of Hormuz contributed to the rise in oil prices.
US President Donald Trump did not rule out the possibility of a major attack against Iran. Trump also argued that Iran should pay compensation for the damage it has caused to the Middle East over the past 50 years.
Trump claimed that Iran was in a very difficult economic situation and could not even pay its own soldiers, but said the country still had the military capacity to cause trouble in the Strait of Hormuz.
Trump said, “The Strait of Hormuz is currently open and the strait is entirely under the control of our navy.” Trump said that only tankers authorized by the US could pass through the strait and that other vessels were being stopped by the blockade.
Risks to energy shipments persist
Risks continuing in the Strait of Hormuz and Bab el-Mandeb may continue to constrain energy flows and tanker shipments in the near term.
If neither side backs down in negotiations between the US and Iran, high volatility in the oil market is expected to persist for some time. Brent crude is projected to move within a range of $75 to $95 per barrel.
Technical indicators show $88.31 as resistance and $87.55 as a support level for Brent crude.
