Oil falls to $96.91 despite attacks in the Strait of Hormuz
By the AFREEQUE newsroom, based on Sowetan and TimesLIVE
Brent fell 1.5% to $96.91 a barrel, while US crude fell 1% to $89.85, after Donald Trump ruled out further strikes against Iran. Attacks on ships near the Strait of Hormuz nevertheless continue to threaten supplies, according to Reuters.
Brent fell 1.5% to $96.91 a barrel on Monday, while West Texas Intermediate (WTI) lost 1% to $89.85, after Donald Trump said further US strikes against Iran were unlikely, according to Reuters. Attacks on ships near the Strait of Hormuz nevertheless continue to fuel concerns over supplies.
Brent had fallen 16% the previous week, its biggest weekly decline since the start of the Covid-19 pandemic. Sugandha Sachdeva, founder of Indian research firm SS WealthStreet, believes prices will retain a geopolitical risk premium until a diplomatic agreement between Washington and Tehran and lasting normalisation of maritime traffic through Hormuz have been achieved. She puts Brent's next support level at $93 a barrel.
The market is also under pressure from an oversupply. JPMorgan estimated on Friday that global production exceeded consumption by 1.1 million barrels per day in September, with the surplus rising to 1.4 million barrels per day in October as Middle Eastern oil flows resumed, production increased in other countries and demand remained weak.
The decline comes after the 8% fall in Brent recorded on 5 November and talks on 6 November between Donald Trump and the Emir of Qatar about a resumption of hostilities with Iran. It also comes a day after the announcement that Trump considers further strikes against Iran very unlikely.
