Oil prices rose on Wednesday after US President Donald Trump denied that he was prepared to ease sanctions on Iran, while Qatar continued diplomatic efforts aimed at reaching a breakthrough. The rise came after prices fell in the previous session as Middle Eastern supply recovered.
Brent crude futures rose $1.14, or 1.11%, to $103.73 a barrel by 01:31 GMT. US West Texas Intermediate crude gained 34 cents, or 0.38%, to $89.72 a barrel.
Brent is on track for a monthly gain of around 14%, its largest increase since July, while US crude is heading for a 4% rise after surpassing $106 a barrel for the first time since May.
The spread between the two benchmark crude grades also widened this month to its largest level in four months, as traders monitored possible US plans to restrict diesel exports. Such measures could create a surplus in the domestic market and prompt US refiners to reduce crude processing.
Trump is considering allowing the sale of red-dyed diesel instead of imposing an export ban, in an effort to ease some price pressures on consumers ahead of the November midterm elections.
Sol Kavanick, head of energy research at MST Marquee, said, “As more evidence emerges of recovering flows through the Strait of Hormuz, hopes will grow for alternatives to restricting US diesel exports, while the lack of any significant Iranian escalation over the past 24 hours has also brought prices down somewhat.”
He added that the situation “remains volatile, with oil logistics service costs high and constrained.”
Qatar said on Tuesday that it hoped diplomatic mediation efforts between Iran and the United States would lead to a breakthrough.
Qatari Foreign Ministry spokesperson Majed Al Ansari told reporters, “Work is still underway to hold meetings and convey messages between the parties. We are working to find common ground in order to reach an agreement that can spare us all the consequences of the conflict.”
Trump, however, denied reports by Axios and CNN citing unnamed US officials as saying he was prepared to ease sanctions on Iran and release frozen Iranian funds in exchange for “concrete” steps by Tehran regarding its nuclear program.
“This is not true. I offered them nothing,” Trump wrote on his Truth Social platform.
Saudi Arabia resumed loading oil tankers at the Red Sea port of Yanbu on Tuesday after the East-West Pipeline was restarted.
Crude oil exports from Middle Eastern producers recovered in September, reaching 16.328 million barrels per day, the highest level since the US-Israeli war with Iran began in late February.
Market sources said on Tuesday, citing American Petroleum Institute data, that US crude oil and gasoline inventories increased while distillate inventories fell last week.
The sources said crude oil inventories rose by 1.02 million barrels in the week ending September 25.
Official inventory data from the US Energy Information Administration is due at 10:30 a.m. Eastern Time (14:30 GMT). Analysts polled by Reuters expect crude oil and petroleum product inventories to have declined.
Source: Reuters
