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Oil slips as Hormuz talks are weighed against Ukraine escalation risk
Brent settled below $88 a barrel while diesel markets were tighter, with New York diesel futures more than doubling for the year as US inventories hit the lowest seasonal level on record.
Oil prices eased in a choppy session as traders assessed signs of diplomatic progress aimed at resuming shipping through the Strait of Hormuz while also factoring in renewed risks of a broader global supply squeeze, LiveMint Markets reports.
Brent settled below $88 a barrel after moving between gains and losses, while West Texas Intermediate was little changed around $82. Oman and Iran pushed for a wider deal on the Strait’s management, with Iran’s military saying the two sides reached a revenue-sharing agreement, though Tehran has said any navigation deal would not necessarily mean an immediate reopening.
Prices rose at points during the session after news that Russian President Vladimir Putin was planning to escalate the Ukraine conflict, raising concerns about a fresh threat to global energy supplies. LiveMint Markets said recent Ukrainian strikes on refineries and ports have squeezed the fuel market and limited Russia’s ability to redirect crude to exports, with diesel particularly affected, and New York diesel futures settling higher, more than doubling already this year.
Additional pressure came from US data showing domestic diesel supplies falling to the lowest seasonal level ever, at the same time heating and the agricultural season are starting. Europe was also hit as buyers drew on imports from Mexico for the first time in seven years, while crude appeared to be moving from the Persian Gulf even though relatively little refined product was leaving, according to the report.
Latest closeWTI crude $81.58 ▼0.9%|Brent $86.32 ▼2.5%