Oil Prices Stagnate Amid Middle East Tensions

Oil prices were mixed on August 17th as diplomatic efforts to resolve Middle East tensions continued without significant progress.

Brent crude futures rose by 27 cents or 0.31% to $88.79, reaching a session high of $89.40, while US West Texas Intermediate crude futures fell by 24 cents or 0.29% to $82.16 a barrel.

The gains were limited due to the absence of major supply outages and the risk of deeper disruption and shortages being weighed against the possibility of a resolution where the Strait of Hormuz is reopened, leading to a sharp decline in oil prices, according to Bjarne Schieldrop at SEB Research.

Schieldrop noted that prices were unlikely to move substantially higher unless there was a halt in the current flow of crude out through the Strait of Hormuz at night and/or a closure of the Bab el-Mandeb Strait.