Oil prices rose on Wednesday for the fourth consecutive day, as investors assessed conflicting messages from Tehran and Washington over whether the Strait of Hormuz was open to shipping.
By 06:30 GMT, Brent crude futures had risen 42 cents, or 0.5%, to $91.44 a barrel, while U.S. West Texas Intermediate crude futures had climbed 51 cents, or 0.6%, to $85.45 a barrel.
Both crude oil benchmarks rose at settlement on Tuesday to their highest levels in more than three weeks, as hopes faded for an end to the trade war between the United States and Iran.
US President Donald Trump said on Tuesday that Washington is not holding any talks with Iran, stressing that the Strait of Hormuz is open, in a comment that contradicts a previous Iranian assertion that the strait remains closed to maritime traffic.
The temporary ceasefire agreement expired on Monday, and a senior Iranian official told Reuters that his country was moving towards a fully offensive military posture due to the diplomatic stalemate, although there were no reports of new attacks from either side on Tuesday.
Data released on Wednesday showed a slowdown in shipping traffic through the Strait of Hormuz, with most ship owners avoiding the vital waterway due to the lack of clear signs of its reopening.
“The risks to shipping are rising again as attacks from Iran and the Houthis continue in both strategic waterways, pushing up oil prices in the near term,” said June Goh, senior oil markets analyst at Sparta Commodities, referring to the Straits of Hormuz and Bab el-Mandeb.
She added: “But producers in the Gulf are finding alternative export routes to transport oil to the Gulf of Oman… If that is sustainable, it could help increase the halted production.”
In an effort to avoid the Strait of Hormuz, the Iraqi cabinet announced on Tuesday the approval of mechanisms to export crude oil through specialized international and local companies and through various export outlets.
A statement issued after the cabinet meeting explained that contracts under the new mechanism will be valid for three months starting from September 1st.
In the United States, market sources reported on Tuesday, citing data from the American Petroleum Institute, that crude oil and distillate inventories fell last week, while gasoline inventories rose.
Official inventory figures from the U.S. Energy Information Administration are scheduled to be released at 10:30 a.m. Eastern Time (14:30 GMT).
Analysts polled by Reuters expect crude inventories to have fallen by about 600,000 barrels in the week ending August 14.
