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Crude oil settles higher as Strait of Hormuz supply remains tight
September WTI gained 1.3% to close at a one week high, while gasoline rose to a 1.5 week high amid slow tanker traffic through the Strait of Hormuz.
Crude oil prices settled higher on Tuesday as supply constraints tied to the Strait of Hormuz continued to underpin the market, according to Yahoo Finance. September WTI crude oil (CLU26) closed up 1.07, or 1.3%, with the contract reaching a one week high, while September RBOB gasoline (RBU26) finished up 0.0012, or 0.04%, to a 1.5 week high.
Trading was volatile through the session, with prices whipsawing on Middle East headlines. The lack of an agreement between Iran and Oman to reopen the strait has been cited as a key factor limiting Middle East crude supply, and Iran state media said the Strait of Hormuz would remain shut until its conditions are met.
Crude’s upward move later faced some limits after Pakistan signaled the US and Iran were close to an arrangement that could reopen the strait, while reporting indicated talks between Oman and Iran had reached an advanced stage. Yahoo Finance also pointed to President Trump hardening his stance toward Iran late Monday, making a near term deal to reopen the strait less likely.
Yahoo Finance added that the risk of renewed flare ups remains elevated, citing an attack on a UAE tanker while transiting the strait and claims by Yemen’s Houthi militants involving strikes on Saudi targets. The report said traffic through the Strait of Hormuz has been slow, and Energy Aspects estimated an average of five vessels transiting the strait.
Latest closeWTI crude $82.68 ▼0.6%|Gasoline (RBOB) $2.882 ▼8.1%