Oil fluctuates amid growing concerns over Middle East supplies

Oil prices rose as doubts about a potential US-Iran deal and attacks on ships heightened fears of supply disruptions in the Middle East, despite data showing a rise in US crude oil inventories. Brent crude futures rose 75 cents, or 0.84 percent, to $89.66 a barrel by 0553 GMT, touching $90 during the session. US West Texas Intermediate crude also rose 72 cents, or 0.87 percent, to $83.92. Both benchmarks had risen by more than a dollar earlier in the session. They also gained more than a dollar at settlement, reaching their highest closing levels since July 31, and continued their gains after a roughly 5 percent jump that followed the fading of hopes for a Washington-Teheran agreement, after US President Donald Trump demanded that Iran compensate the United States for victims of previous wars, attacks, and protests.

“The Middle East is increasingly becoming a battleground between diplomacy and war, keeping oil prices swinging like a pendulum between $70 and $90 a barrel,” said Priyanka Sachdeva, head of market research at Phillip Nova in Singapore, according to Reuters.

Shipping data showed that traffic through the Strait of Hormuz fell to its lowest level in eight weeks. Pre-war levels averaged between 125 and 140 ships per day. On the supply side, a Reuters survey showed that US crude oil and fuel inventories are expected to have fallen last week. However, market sources, citing data from the American Petroleum Institute, said that US crude oil inventories rose sharply in the week ending August 7, while gasoline and distillate inventories declined.