Brent climbs back to around 100 dollars after fresh reports of tankers ablaze in the Gulf
After Wednesday's sharp fall, traders doubt the shift of power in Washington will quickly lead to free passage through Hormuz.
Oil prices rose again on Thursday and on Friday morning. A barrel of Brent closed 3.9 percent higher on Thursday at 98.29 dollars and US WTI gained 2.7 percent to 90.52 dollars, BigGo Finance reports. A day earlier both had fallen by more than 8 percent to their lowest level since late August, on hopes that the Democratic win in Congress would increase pressure to end the war with Iran. On Friday morning in Asia, Brent was trading around 100 dollars again according to HDFC Sky, although the loss over the whole week remains more than 12 percent.
The rebound was triggered by new incidents in the Strait of Hormuz. Iran's Revolutionary Guard said on Thursday that tankers and a tugboat were on fire after a tanker struck a sea mine, and the Iranian military later spoke of three more damaged tankers, VRT NWS reports. Independent maritime bodies did not confirm this; Britain's UKMTO recorded one incident off the coast of Qatar, in which a tanker was reportedly hit by two projectiles.
ANZ strategist Daniel Hynes calls Wednesday's drop excessive, because shipping through the strait is still running below 60 percent of capacity and Iran controls the passage, HDFC Sky writes. Eurasia Group, according to BigGo Finance, cut the probability of a deal between Washington and Tehran from 20 to 10 percent and warns that an escalation could push Brent to 110 to 125 dollars. Ukrainian drone attacks on Russian refineries, including the one in Ryazan, are also keeping the market on edge.