Oil steadies after two-day slump as investors eye Hormuz traffic
Oil steadied on Wednesday after steep falls in the previous two trading sessions, as investors waited to see if efforts to end the U.S.-Iran war and restore traffic through the blockaded Strait of Hormuz were making progress.
Brent crude futures rose 26 cents, or about 0.33%, to $79.62 a barrel by 0110 GMT. U.S. West Texas Intermediate futures rose 0.16%, or 12 cents, to $75.90 a barrel.
Qatar said on Tuesday mediators were making progress in efforts to end the war, driving oil prices lower, although Tehran has denied U.S. President Donald Trump's assertion that talks are already under way. Brent closed on Tuesday below $80 a barrel for the first time since July 13.
“The main sticking point appears to be whether Iran will continue to insist on a degree of control over the waterway, and whether the U.S. will stand its ground and refuse that outcome,” analysts from IG said in a note.
Brent closed more than 5% lower on Tuesday after the comments from Qatar, extending Monday's steep losses on hopes that an arrangement could soon be reached. Prior to the beginning of the war some 20% of the world’s oil and liquefied natural gas transited through the strait, and in March alone prices rose 50%.
Trump and Qatar's Emir Sheikh Tamim bin Hamad Al Thani discussed efforts to narrow differences between Washington and Tehran and improve the prospects for a lasting settlement during a phone call on Tuesday, Qatar's Emiri office said.
Trump said on Monday that talks with Tehran had started and Iran faced a "last chance" to reach a deal. Iranian officials insisted no negotiations with the U.S. were taking place.
U.S. crude and gasoline inventories rose while distillate stocks fell last week, market sources said on Tuesday, citing data from the American Petroleum Institute.
Crude stocks rose by about 2.7 million barrels in the week ended July 31, the sources said on condition of anonymity.
Official numbers from the EIA, the statistical arm of the U.S. Department of Energy, are due at 10:30 a.m. ET (1430 GMT) on Wednesday.
