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Oil Moves Higher, But Remains Under US$100 on Hopes Around Talks Between the U.S. and Iran

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Oil prices rose early Thursday, but remained firmly below the US$100 mark on hopes the United States and Iran will extend their ceasefire and resume talks to end war in the Middle East.

West Texas Intermediate crude oil for May delivery was last seen up $0.43 to US$91.72 per barrel, while June Brent oil was up $0.95 to US$95.88.

The U.S. Navy is blockading Iranian ports while Iran continues to block the Strait of Hormuz. However, U.S. President Trump's Wednesday comments that he, once again, thinks the end of the conflict is near, while Pakistan mediators continue to press for a resumption of talks between the two countries, is offering some hope for an end to a war that has kept the 20% of daily oil and gas demand from Persian Gulf Nations off the market.

The supply shock has hit hardest in Asian nations, where some countries have introduced rationing while bidding up prices for immediately available supplies that are fetching near US$150 per barrel.

"Oil has steadied...on signs the US and Iran may extend a ceasefire and restart talks aimed at ending a war that has choked global supplies of key commodities from the Persian Gulf. This has triggered a major supply shock, the impact of which continues to build globally, with the relative calm and sub-USD 100 futures prices not fully reflecting the reality in the physical market," Saxo Bank noted.

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