- BIST10011,585-1.16%
- USD49.45+0.05%
- EUR55.62+0.37%
- GOLD4,183.60+0.06%
- INTEREST37.00%-1.00
- BITCOIN82,537+0.64%
- October 19, 202617°
- BIST10011,585-1.16%
- USD49.45+0.05%
- EUR55.62+0.37%
- GOLD4,183.60+0.06%
- INTEREST37.00%-1.00
- BITCOIN82,537+0.64%
- October 19, 202617°
Expectations of easing Iran tensions pull Brent crude down to $108.06
The November Brent crude contract fell 0.6% to $108.06 as of 9:27 a.m. today, pressured by the U.S. House of Representatives’ resolution on the conflict with Iran and developments affecting global energy supplies.
The November Brent crude contract fell 0.6% to $108.06 as of 9:27 a.m. today. After rising as high as $109.45 the previous day, the price ended the session at $108.75.
The U.S. war powers resolution concerning the conflict with Iran and expectations that tensions between Washington and Tehran could ease put downward pressure on oil prices. At the same time, the October West Texas Intermediate crude contract traded at $104.71 per barrel.
U.S. House resolution on Iran affects prices
The U.S. House of Representatives passed a war powers resolution calling for American forces to withdraw from the conflict with Iran. The resolution calls on U.S. President Donald Trump to withdraw American forces from the conflict with Iran. The House has now passed a similar resolution for the third time.
Gregory Meeks, a Democratic member of the House Foreign Affairs Committee, said the United States had been involved in the conflict for nearly 200 days. Meeks argued that the Trump administration had failed to achieve its stated goals and listed rising gasoline prices and mortgage rates, inflation, billions of dollars in public spending and casualties suffered by the U.S. military among the costs of the conflict.
The resolution strengthened expectations that tensions between Washington and Tehran could ease, supporting the decline in oil prices.
Fed rate decision awaited
Expectations that the Federal Reserve will tighten monetary policy also weighed on oil prices. The Fed, which kept its policy rate unchanged at 3.50%–3.75% at its July meeting, is expected to raise rates by 25 basis points in its decision to be announced on September 16.
Although a potential rate increase would not directly eliminate the supply shortage, it could limit economic activity and oil demand in the United States, the world’s largest oil consumer.
Developments in the Russia-Ukraine energy corridor monitored
Donald Trump’s efforts to halt reciprocal attacks on energy infrastructure between Russia and Ukraine contributed to easing concerns over global energy supplies.
Trump said Ukraine and Russia had agreed not to strike each other’s energy facilities. He also said the main cause of the global rise in diesel prices was not Iran but, to a large extent, the Russia-Ukraine War.
Ukrainian President Volodymyr Zelenskyy said attacks had been carried out on oil refineries and drone production facilities in Russia, while Russia continued to target Ukraine’s energy system and critical infrastructure. Maria Zakharova, a spokesperson for Russia’s Foreign Ministry, said the proposal for an energy ceasefire needed to be supported by concrete steps.
Efforts to halt attacks on energy infrastructure increased expectations that the risk of supply disruptions could ease, contributing to the pullback in oil prices.
Pipeline disruption in Saudi Arabia keeps supply concerns alive
Saudi Arabia’s East-West Oil Pipeline, which bypasses the Strait of Hormuz, was shut down after the attacks on September 10. This kept concerns alive that supply disruptions could affect shipments.
Some September oil shipments scheduled for delivery to Europe on September 15 were canceled. If the disruption to the pipeline continues, up to 4% of global oil supplies could be at risk.
Technically, $114.79 is being monitored as resistance and $101.74 as support for Brent crude.
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