Oil settles 1% higher as hopes of renewed US-Iran negotiations offset Houthi threat
Oil settled 1% higher on Monday after volatile trading, as traders weighed hopes of renewed U.S.-Iran negotiations against Yemen's Houthis imposition of a naval blockade against Saudi Arabia. Brent crude futures settled $1.12, or around 1.3%, higher at $89.22 a barrel after hitting $91.42 for their highest since June 11. U.S. West Texas Intermediate crude closed 74 cents, or 0.9%, higher at $83.23 after touching its highest level since June 12 at $85.39.
The Middle East conflict escalated over the weekend, with the U.S. conducting a ninth straight night of attacks against Iran, while U.S. allies Kuwait and Bahrain reported more Iranian strikes. Mediators have passed Iran a proposal to de-escalate the war with the U.S., suggesting a 10-day ceasefire to find ways to revive an interim deal reached last month, a senior Iranian official told Reuters on Monday. Daniela Hathorn, Senior Market Analyst at Capital.com, stated, "While the conflict remains far from resolved, the prospect of renewed talks has eased immediate concerns over further disruptions to oil supply and shipping through the Strait of Hormuz." Yemen's Iran-aligned Houthis said on Monday they would impose a naval blockade on Saudi Arabia. Rystad Energy's Jorge León, head of geopolitical analysis, added that about 2.5 million barrels per day of Saudi oil is at risk from the Houthi threat.
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Oil prices saw volatile trading as hopes for renewed US-Iran negotiations emerged amidst escalating Middle East conflict. This delicate balance of
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