Oil Held, Market Monitors Hormuz Escalation
Oil prices moved slightly lower on Thursday (July 16th) after posting three consecutive sessions of gains. Investors began weighing the impact of the United States military operation against Iran and the potential for longer shipping disruptions in the Strait of Hormuz.
Brent for September delivery fell 0.4% to US$84.58 per barrel, while WTI weakened 0.1% to US$79.56 per barrel. Despite the correction, both benchmark prices remained near one-month highs after surging nearly 10% earlier in the week.
Market focus remains on the security of the Strait of Hormuz, a vital waterway through which approximately one-fifth of global oil and LNG shipments typically pass. Tensions escalated after the US again attacked Iranian military targets, allegedly linked to attacks on commercial vessels in the Gulf region.
Washington said the operation aimed to weaken Iran's ability to threaten maritime traffic. Meanwhile, Tehran called the conflict with the US an "existential war" and warned that regional energy exports could be disrupted again if the attacks continued.
On the supply side, Energy Information Administration data shows that US crude oil inventories fell by 1.7 million barrels in the week ending July 10. Gasoline stocks also fell by 1.5 million barrels due to continued strong summer demand, although distillate stocks rose by 4.6 million barrels.
As for the market impact, the oil price correction does not necessarily mean the risks have subsided. As long as the US-Iran conflict continues and the Hormuz Passage remains unsecured, oil prices have the potential to remain high. If disruptions to energy exports worsen, global inflationary pressures could rise again, making the market more cautious about the direction of central bank interest rates. (arl)
Source: Newsmaker.id
