Brent oil whipsawed as traders parse the status of negotiations between the US and Iran.
The global benchmark pared losses to trade near $108 a barrel after Bloomberg reported that claims the US and Iran are close to an agreement are inaccurate. An earlier unconfirmed report on Iran war negotiations had knocked oil off of five-month highs, while European natural gas futures also fell.
Crude prices have jumped in recent sessions as hostilities flare across the Middle East, with Iran stepping up attacks on tankers in the Strait of Hormuz.
Traders are wary of potential efforts by the administration of US President Donald Trump to dial down the Iran conflict before the Nov. 3 midterm election, with soaring energy costs stemming from the conflict set to be a key voter issue. When prices last topped $100 a barrel for an extended stretch nearly five months ago, the US and Iran entered a short-lived ceasefire agreement that briefly reopened Hormuz, the vital energy transit route.
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The inaccurate report on the war “reduces the willingness for risk taking and therefore results in even less liquidity and makes price movement worse and harder to call,” said Scott Shelton an energy specialist at TP ICAP Group Plc.
Iranian attacks on vessels in Hormuz in recent weeks have increased the market's risk premium and made prospects for an end to the war appear increasingly remote. Iran was hitting more ships and inflicting greater damage than earlier in the conflict, raising the risk that fewer tankers will be available to transport crude.
Brent has surged more than 80% this year as conflicts in the Middle East and Russia-Ukraine disrupted energy supplies. Refined products have rallied even harder, with renewed attacks on tankers and energy infrastructure keeping geopolitical risks elevated.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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