Oil Prices Rebound on Hopes for Diplomatic Breakthrough
Oil prices snapped a three-session losing streak on Thursday after reports that US President Donald Trump is not interested in reviving a memorandum of understanding reached with Iran in June. The Wall Street Journal reported that the Trump administration has repeatedly told mediators it has no interest in reviving the agreement, complicating diplomatic efforts to restart talks.
Brent crude futures finished up $1.86 or 2.1% at $89.70 a barrel, while US West Texas Intermediate crude futures settled up $1.30 or 1.6% at $83.53. Investors scaled back expectations of a diplomatic breakthrough that could boost oil flows from the Middle East.
UBS analyst Giovanni Staunovo said that a lack of progress in talks combined with restricted oil flows may have prompted an adjustment of market views. The Strait of Hormuz, which handles about one-fifth of global daily oil and liquefied natural gas supplies, saw a slight improvement in vessel traffic on Wednesday.
Iran's top security official Mohsen Rezaei warned that Tehran would target US military and economic interests if Washington started any 'mischief' during talks with Qatari officials. The US has announced sanctions on Iran, which it called the 'toughest sanctions in history.'