Global oil prices jumped to a four-year high of more than $126 a barrel on Thursday on concerns that the U.S.-Iran war could worsen and lead to a protracted Middle East supply disruption that could hurt global economic growth, but later retreated.
The Strait of Hormuz crisis has drained 850M barrels, pushing WTI to $107 and Brent eyeing $115, while Natural Gas bears target $2.46.
Front-month international crude prices hit a wartime high as investors worry that the U.S. could restart its attacks on Iran.
Brent crude oil hits a war-time record of more than $123 per barrel after Axios reports U.S. President Trump is to be briefed on potential further strikes on Iran after rejecting Tehran's offer to re-open the Strait of Hormuz. The ECB and BoE are both expected to hold rates steady later today, following on from the Federal Reserve's decision to keep rates steady.
Oil prices were mixed in early trade but may be buoyed by the prospect of a prolonged closure of Strait of Hormuz.
Oil extended gains on Thursday as signs of a prolonged U.S. blockade on Iranian exports and stalled nuclear negotiations. Prices rose as the Wall Street Journal reported, citing U.S. officials, that Donald Trump had instructed aides to prepare for an extended blockade of Iran.
SUMMARY US' energy independence has helped mitigate negative economic effects of the oil price shock. Unit labor costs are growing at a slower rate, suggesting core inflation should moderate over time.
The United Arab Emirates - one of the world's leading producers of crude oil - has decided to quit the Organization of Petroleum Exporting Countries.
With oil flirting near $120 a barrel and inflation refusing to cool, the Federal Reserve is expected to do the only thing it can on Wednesday: nothing. The decision would also mark what is likely Jerome Powell's final meeting as chair of the US central bank, an understated exit for a central banker who rarely sought the spotlight.
Commercial crude oil stocks fell by 6.2 million barrels, and were about 1% above the five-year average for the time of year, the EIA said. Crude inventories were seen down by 100,000 barrels in a survey of analysts by The Wall Street Journal.
Oil futures rallied further Wednesday, with the key contract nearing its highs reached in the early days of the Iran war with little progress made on getting oil tankers through the Strait of Hormuz.
Spot premiums for physical crude have slipped from record highs reached earlier during the Iran war as refiners are drawing on inventories and cutting back processing to cope with lost Middle East supply, traders and analysts said.