Oil Prices Supported by Persian Gulf Tensions

Oil prices remain supported by tensions between the US and Iran in the Persian Gulf. Despite the escalation, oil continues to flow through the Strait of Hormuz, averaging over 9 million barrels per day with the help of US Navy escorts.

OPEC+ kept its output quotas unchanged for October, which is not surprising given their announced increases this year. However, most members will produce below their quota due to ongoing disruptions in the Persian Gulf.

Speculators have increased their net long position in ICE Brent, buying 37,837 lots and leaving them with a total of 261,435 lots as of last Tuesday. While fresh buying and short covering were significant, most of the increase came from short covering.