September 29, World (LNW): International crude prices moved higher for a second consecutive trading session on Tuesday as uncertainty surrounding oil supplies from the Middle East continued to overshadow signs of a gradual recovery in regional exports.
Brent crude futures gained $1.49, or 1.4 per cent, to reach $106.77 a barrel by 3.26 a.m. GMT, while US West Texas Intermediate rose $1.34, or 1.5 per cent, to $93.94. Both benchmarks had already posted gains of almost $1 a barrel during the previous session.
Market analysts said concerns over the reliability of supply routes were keeping prices elevated despite evidence that more crude was reaching international buyers.
KCM Trade chief analyst Tim Waterer said exports from the Gulf appeared to be recovering, although some shipments were being handled through alternative arrangements such as transfers between vessels. Such methods can increase both costs and logistical complications compared with conventional exports, he noted.
Preliminary figures from data provider Kpler showed crude shipments from major Middle Eastern producers reaching 12.8 million barrels a day in September, the highest monthly level since February. Increased exports from Saudi Arabia and the United Arab Emirates contributed to the rise.
Attention is nevertheless firmly focused on the continuing confrontation between the United States and Iran. Officials from both countries have held separate discussions with intermediaries in a renewed attempt to find a way towards ending the seven-month conflict.
Further diplomatic efforts are expected to centre on a revised version of a seven-day proposal put forward by Iran during last week’s United Nations General Assembly meetings.
Analysts at UOB said the US-Iran dispute remained the principal source of uncertainty for energy markets, with developments potentially influencing both crude prices and expectations for inflation.
Concerns have also intensified over the Strait of Hormuz, one of the world’s most important routes for oil and gas shipments. Any significant disruption in the waterway could have wider repercussions for global energy supplies and markets.
Meanwhile, Washington is examining another measure aimed at easing pressure on the US diesel market. People familiar with the discussions said the administration was considering regulatory changes that could permit wider sales of red-dyed diesel, potentially allowing some consumers to avoid the federal fuel tax.
The proposal is being considered as an alternative to a broader restriction on diesel exports, amid continuing efforts to contain fuel costs and protect domestic supplies.