Oil Stabilizes with Iran Talks in Focus

(MENAFN- MENAFNEditorial)


Oil prices stabilised on Wednesday as markets weighed the next stage in US-Iran mediation after the US midterm elections. President Trump's comments on Tuesday that he had no intention to engage in new military action against Iran eased immediate fears of another escalation.

However, markets could remain cautious as long as a deal is not agreed upon by both parties. Meanwhile, mediation efforts continue, with both sides reviewing proposals to narrow their differences, but a breakthrough remains far from assured.

In the physical market, Gulf supply remains plentiful. Combined crude exports from Saudi Arabia, the UAE, Iraq and Kuwait rose by 10% in October to around 15.5 million barrels per day, broadly in line with levels seen before tensions escalated. However, security concerns continue to disrupt traffic and keep transport costs elevated.

The API figures provide some support with a draw of 5.27 million barrels in crude stocks, contrary to expectations of an increase. The EIA report, due later today, will provide more clarity. A build could put downward pressure on crude prices.

Looking ahead, mediation efforts remain the main driver. An interim memorandum paving the way for the reopening of the Strait of Hormuz would help improve conditions in the Gulf and push crude lower. A breakdown in talks or renewed military escalation would rebuild the geopolitical risk premium.

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