Oil Holds Tight, Iran Shadow Widens
Oil prices held steady after posting their biggest daily surge since October. This rally was fueled by concerns that a US military intervention in Iran could happen sooner than expected.
West Texas Intermediate (WTI) traded above $65 per barrel after rising 4.6% on Wednesday. Meanwhile, Brent closed above $70 per barrel for the first time in more than two weeks.
An Axios report said a US military operation—if it occurs—could potentially lead to a weeks-long campaign, and the Israeli government is said to be pushing a scenario leading to regime change in Iran. These issues have led the market to re-attach a "risk premium" to oil prices.
If the conflict escalates, supply could be impacted, as the region accounts for about a third of global oil production. However, US President Donald Trump also faces political risks ahead of this year's midterm elections if the surge in oil prices pushes up gasoline prices.
On the diplomatic front, talks have so far failed to produce a breakthrough. Tehran said there was a "general understanding" with Washington on the framework of a potential nuclear deal, and a US official said Iranian negotiators would return to Geneva in two weeks with a new proposal.
On Wednesday, the US also announced visa restrictions for Iranian officials and executives, citing repressive measures against anti-government protests and internet shutdowns. In terms of prices, the March WTI contract rose slightly to around $65.22 per barrel in Asian trade, while April Brent crude rose 4.4% to $70.35. (asd)
Source: Newsmaker.id
