Ammon News - Oil prices climbed for a fourth ​straight day on Wednesday as investors weighed conflicting messages from Tehran and Washington on whether the ‌Strait of Hormuz is open to ships.

Brent crude futures climbed 42 cents, or 0.5%, to $91.44 by 0630 GMT, while U.S. West Texas Intermediate crude futures were up 51 cents, or 0.6%, to $85.45 a barrel.

Both contracts closed on Tuesday at their highest in over three weeks ​as hopes of peace between the U.S. and Iran faded.
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U.S. President Donald Trump said on Tuesday no talks ​were taking place with Iran and insisted the Strait of Hormuz was open, contradicting Iran's ⁠assertion that the critical waterway remained shut to shipping.

A temporary ceasefire agreement expired on Monday and a senior Iranian ​official told Reuters that his country was moving to due to the diplomatic stalemate, though there were ​no reports of fresh strikes by either side on Tuesday.

Shipping through Hormuz slowed, data showed on Wednesday, as most shipowners avoided the key waterway due to a lack of clear signalling on its reopening from a blockade.

"The shipping risks are increasing again as attacks from ​Iran and Houthis remain prevalent in both key chokepoints, keeping oil prices supported in the near term," said June ​Goh, senior oil market analyst at Sparta Commodities, referring to the Strait of Hormuz and Bab el-Mandeb strait.

"However, Gulf producers are finding ‌alternative export ⁠routes to bring oil out to the Gulf of Oman," said Goh. "If sustainable, this could help increase shut-in production from these two producers."

To avoid the Strait of Hormuz, Iraq's cabinet approved mechanisms for exporting Iraqi crude through specialized international and local companies and via multiple export outlets, the government said on Tuesday.

The contracts under the new mechanism will run ​for three months starting September ​1, according to a statement ⁠issued after the cabinet meeting.

With me to discuss what happens next is Wood Mackenzie Research Director Sushant Gupta.

"For the near term, I see a relatively firm floor (for oil prices) but limited conviction to chase the upside aggressively," said Priyanka Sachdeva, head of ​market insights at Phillip Nova.

"Traders are likely to remain cautious as long as there ​is a possibility ⁠of another round of talks, but persistent constraints around Hormuz or further evidence of tightening product supplies could change that balance quickly," she added.

Meanwhile, U.S. crude oil and distillate inventories fell while gasoline stocks rose last week, market sources said, citing ⁠data ​from the American Petroleum Institute.

Official inventory numbers from the U.S. Energy Information ​Administration are due at 10:30 a.m. ET (1430 GMT). Analysts polled by Reuters expect crude stocks fell by about 600,000 barrels in the week ended August ​14.


Reuters