Oil prices extended their rally into a second session on Thursday as traders saw little sign of a breakthrough in U.S.-Iran talks. Iran's president hardened his rhetoric at the UN even as a senior Iranian official reviewed a U.S. counter-proposal, while Qatar increased LNG shipments through the Strait of Hormuz.
Brent crude rose 3.17% to $106.35 a barrel by 4:28 a.m. ET Thursday, extending gains from the previous session as investors found scant evidence of progress toward a diplomatic solution to the Middle East conflict. West Texas Intermediate futures for November moved 2.56% higher to $94.52 per barrel over the same window.
Earlier in the session, both benchmarks had fallen nearly 1% before turning higher, with Brent up just 0.3% to $103.35 a barrel and WTI up 0.2% to $92.34 a barrel as of 02:32 a.m. ET. That followed a sharp Wednesday session in which Brent settled nearly 4% higher and WTI climbed nearly 2%.
Pezeshkian hardens his tone at the UN
Iranian President Masoud Pezeshkian blamed the U.S. and Israel for stoking global instability in an address to the United Nations General Assembly. His remarks came a day after Trump warned he could annihilate Iran if a deal to end the conflict could not be reached. According to a live translation of his speech: "We have been the victims of terrorism." Pezeshkian also said Iran would not surrender to U.S. pressure while remaining open to diplomacy.
Behind-the-scenes talks continue
Yet a senior Iranian official told Reuters that Tehran was reviewing Washington's response to an Iranian proposal to end hostilities, though significant differences remained. Indirect discussions have included the possible reopening of the Strait of Hormuz, a waterway that normally handles roughly one-fifth of global oil and gas shipments, and the lifting of a U.S. naval blockade on Iran. Iranian security chief Mohsen Rezaei said Wednesday that the strait would not reopen until Tehran's conditions were met.
Gulf supply eases the upside
Rising output elsewhere in the Gulf has capped the advance in crude oil: Saudi Arabia has restarted operations on its East-West pipeline to the Red Sea, while Iraq has increased exports and expects to raise shipments through Turkey. U.S. crude inventories, meanwhile, rose by 3 million barrels to 426.4 million barrels in the week ended Sept. 18, compared with analysts' expectations for a 640,000-barrel draw, according to the Energy Information Administration.
Qatar tests Hormuz shipping again
Qatar has ramped up LNG tanker traffic through the Strait of Hormuz to the highest level in more than two months, a sign the country is growing more comfortable moving ships through the waterway. At least two laden carriers were sent outbound through the strait in the past week, while at least two moved the opposite direction into the Persian Gulf, according to ship-tracking data compiled by Bloomberg; one shipment is headed for India's west coast. The uptick marks Qatar's most sustained rise in tanker activity since early July, when the country largely halted exports through the strait after one of its vessels was attacked.
Its Ras Laffan plant, the world's largest natural gas export facility, can resume operations at undamaged sections within a couple of weeks of Hormuz reopening, Energy Minister Saad Sherida Al-Kaabi said at the Qatar Economic Forum in New York.
Sources: CNBC, Investing.com, Rigzone
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