(Bloomberg) — Oil fell for a fourth day, set for the longest losing run since June, as traders tracked diplomatic efforts to end the US-Iran war and signs that cargoes are still getting through the Strait of Hormuz.
Brent dropped toward $101 a barrel, while West Texas Intermediate was below $98. President Donald Trump told Fox News he would “probably” be open to meeting his Iranian counterpart, Masoud Pezeshkian, on the sidelines of the UN General Assembly in New York this week. The US leader will also hold a summit with Chinese President Xi Jinping, and may meet with Persian Gulf nations.
Crude and liquefied natural gas flows through Hormuz in the past two weeks are running at a six-month high, according to Admiral Brad Cooper, head of US Central Command. The waterway’s primary transit lanes are clear of mines and Persian Gulf allies have shipped more than 1 billion barrels of crude through it “in the last couple months,” he said in a video message.
“The market is transitioning from deteriorating supply conditions to a stage where the worst of the crunch may have passed,” said Xuyi Zhao, senior oil analyst at Guotai Junan Futures. Still, Brent is likely to consolidate around $100 as conditions for a sustained downtrend aren’t yet in place, she added.
Brent oil has still soared by almost 70% this year, as the war disrupted flows through Hormuz, which connects the gulf to global markets, and Ukraine continued to pound Russia’s energy infrastructure. Petroleum products such as diesel have rallied harder than crude, boosting inflationary pressures.
Supply risks remain in Middle East. Saudi Arabia issued air-raid alerts for Riyadh — the first in the capital since the height of the US-Iran war in March and April — as well as warnings in Red Sea hubs including Yanbu. The kingdom has been facing threats from Iran-backed Houthis in Yemen.
Traders were looking for more signs that Riyadh has been making progress in restoring operations of its East-West pipeline, the conduit that runs across the country to the Red Sea, which was damaged in attacks earlier this month. Saudi Aramco has told refining customers in Europe they will be allocated no crude next month under long-term agreements after the interruption.
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