Gas prices at a Chevron gas station rise to over 8.00 US dollars a gallon in Los Angeles, California, March 23. EPA-Yonhap
SINGAPORE — Oil prices rose on Tuesday on supply fear, as Iran denied it had talks with the United States to end the war in the Gulf, contradicting U.S. President Donald Trump who said a deal could be reached soon.
Brent futures rose $4, or 4 percent, to $103.94 a barrel at 0400 GMT, while U.S. West Texas Intermediate (WTI) climbed $3.49, or 4 percent, to $91.62.
Crude futures dropped more than 10 percent on Monday, after Trump ordered a five-day delay to attacks on Iran's power plants, saying the U.S. had talks with unnamed Iranian officials that produced "major points of agreement."
"By shelving the plan to strike Iranian power plants for five days, the U.S. effectively sucked much of the 'war premium' from the oil price," said KCM Trade chief market analyst Tim Waterer.
"Today's moderate bounce is just the market finding its footing in the mud. Traders are aware that while the missiles are on hold, the Strait of Hormuz is still far from a clear waterway."
The war has all but halted shipments of about one-fifth of the world's oil and liquefied natural gas through the Strait of Hormuz. However, two tankers bound for India sailed through the strait on Monday.
Tehran rejected the claim of contact with Washington, dismissing it as an attempt to manipulate financial markets, while Iran's Revolutionary Guards said they had attacked U.S. targets and denounced Trump's comments as "worn-out psychological operations."
"Even with a possible decrease in tensions after (Monday's) announcement from President Trump, we expect a price floor of $85–$90 and a natural drift back to the $110 range until the Strait of Hormuz is restored," Macquarie said in a client note.
If the strait remains effectively shut until the end of April, Brent could still reach $150 a barrel, Macquarie said.
Source: Korea Times News
