Brent crude rises to $88.02
The October futures price of Brent crude reached as high as $87.93 per barrel the previous day before closing the session at $87.72. As of 9:15 a.m. today, the price had risen 0.34% from the previous close to reach $88.02.
West Texas Intermediate crude for September delivery was trading at $82.50 per barrel at the same time.
Risks involving the Strait of Hormuz are being monitored
The rise in oil prices was driven by fading hopes for an agreement between the United States and Iran aimed at ending the war and reopening the Strait of Hormuz.
U.S. President Donald Trump kept open the option of a possible major attack against Iran. Trump also argued that Iran must pay compensation for the damage it has caused to the Middle East over the past 50 years.
Trump claimed that Iran was in severe economic difficulty and could not even pay its own troops, but said the country nevertheless still had the military capacity to cause trouble in the Strait of Hormuz.
Trump said, "The Strait of Hormuz is open right now, and the strait is completely under the control of our navy." He said that only tankers authorized by the United States could pass through the strait, while other vessels were being stopped by the blockade.
Volatility expected in energy transportation
Risks in the Strait of Hormuz and Bab el-Mandeb could continue to constrain energy flows and tanker shipping in the near term.
If the parties do not back down in negotiations between the United States and Iran, high volatility in the oil market could persist for some time. Brent crude is expected to move within a range of $75-$95 per barrel.
Technical indicators show $88.31 as resistance and $87.55 as support for Brent crude.
