Crude oil prices extended their gaining streak to five days today, with Brent crude trading at $106.30 per barrel at the time of writing and West Texas Intermediate at $96.68 per barrel.
Bloomberg attributed the continued price rise to President Trump’s latest social media posts, which suggest the prospect of peace with Iran remains distant. The publication cited two unnamed U.S. government officials as saying that the U.S. president’s recent social media activity and the continuing blockade of Iranian ports have not been conducive to progress on the peace talks that Pakistan is mediating.
Brent crude and WTI have gained a cumulative 17.13% and 15.13%, respectively, this week, Reuters reported. Earlier today, the benchmarks got a fresh boost from reports of strikes against Tehran. Some analysts warn that the ceasefire may only provide a pause to the hostilities before they resume, pushing oil prices even higher later in the year.
A couple of tanker seizures from the U.S. Navy have reinforced pessimistic expectations, with Iran vowing retaliation and fulfilling that promise by seizing two other vessels.
“As hopes fade, the reality of the supply disruption will set in, leaving further upside for prices. If no progress is made, the market will become increasingly numb to the noise and headlines that have dictated price action recently,” ING commodity analysts wrote in a note on Thursday.
Meanwhile, the tanker traffic disruption is taking its toll. “We continue to see growing demand destruction in the oil market, a trend that will intensify as Persian Gulf supply disruptions persist. Airlines continue to announce flight cancellations amid a tightening in jet fuel supply and significant price strength,” Warren Patterson and Ewa Manthey also wrote.
Earlier this week, the head of the International Energy Agency, Fatih Birol, reiterated his statement that the war between the U.S. and Israel, and Iran has resulted in the largest energy security threat the world has ever faced.
By Irina Slav for Oilprice.com
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