Oil prices rise
The October contract for Brent crude, which rose as high as $87.93 yesterday, ended the session at $87.72 per barrel. As of 09:15 today, the price of Brent crude had risen 0.34% from the previous close to $88.02 per barrel.
At the same time, the September contract for West Texas Intermediate crude was trading at around $82.50 per barrel.
Strait of Hormuz and negotiations remain in focus
The decline in hopes for an agreement between the United States and Iran aimed at ending the war and reopening the Strait of Hormuz contributed to the rise in oil prices.
U.S. President Donald Trump left the door open to a possible major attack on Iran. Trump also argued that Iran should 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 soldiers, but said the country nevertheless still had the military capacity to cause problems in the Strait of Hormuz.
Trump said, "The Strait of Hormuz is currently open 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.
Risks to energy flows
Risks in the Strait of Hormuz and Bab el-Mandeb could continue to restrict energy flows and tanker shipping in the near term.
High volatility in the oil market could persist for some time if the parties fail to step back in negotiations between the United States and Iran. Brent crude is expected to trade in the range of $75-$95 per barrel.
Technically, $88.31 is being monitored as resistance for Brent crude, while $87.55 is considered a support level.
