Oil Prices Steady Amid Iran Blockade and Rising US Inventories
Crude oil prices have steadied, despite being influenced by two powerful forces. On one hand, the United States has warned that its naval blockade of Iran could continue indefinitely due to stalled ceasefire talks, which would pose a significant threat to supply as the Strait of Hormuz carries about 20% of global oil flows.
On the other hand, weakening demand expectations and rising U.S. inventories are limiting crude's ability to extend its recent rally. In fact, U.S. commercial crude inventories surged by 17.4 million barrels to 424.4 million barrels in the week ended Aug. 7, according to the Energy Information Administration.
Brent crude futures traded at $87.08 a barrel at 2:47 a.m. GMT on Aug. 14, while West Texas Intermediate crude stood at $81.31, leaving both benchmarks on course for weekly gains of about 4%.