Oil prices were steady in early trading on Thursday as market participants balanced geopolitical concerns over a potential U.S.-Iran confrontation with conflicting signals on the security of maritime routes through the Strait of Hormuz.
By 0037 GMT, Brent crude futures for October delivery were up 25 cents, or 0.3%, at $91.87 a barrel. U.S. West Texas Intermediate (WTI) futures for September delivery were down 2 cents at $85.81 a barrel, while the more actively traded WTI October contract gained 14 cents, or 0.2%, to $84.53.
Both the Brent and WTI benchmarks recorded gains for a fourth consecutive session on Wednesday, closing at their highest levels since July 24. Market-watchers noted that the September WTI contract was due to expire later on Thursday.
Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities, said the market remained on elevated footing but lacked a fresh catalyst. "Oil prices remained elevated as the market is supported by sporadic attacks in the Middle East but lacks fresh momentum without a major escalation," he said. He added that uncertainty around diplomatic talks and regional tensions were likely to keep prices on a gradual upward trajectory: "The market is likely to maintain a gradual upward trend given uncertainty over peace talks and tensions involving the United Arab Emirates, Oman and Iran."
The United Arab Emirates has suspended all financial and economic transactions with Iran until further notice, a move that has drawn renewed attention to strained relations between the Gulf oil producer and Tehran.
On the diplomatic front, U.S. President Donald Trump said on Tuesday that no talks were taking place with Iran and that the Strait of Hormuz remained open. Iran, however, maintained that the waterway was still closed.
Data indicated that shipping through the Strait of Hormuz slowed on Wednesday as most shipowners steered clear of the key passage. The pullback followed a lack of clear communication about the reopening of the waterway after a blockade was imposed during the Iran war.
In energy inventory data, the U.S. Energy Information Administration reported weekly movements in stockpiles that also shaped sentiment. Crude inventories rose by 4.4 million barrels in the week ended August 14, versus expectations for a 600,000-barrel draw. The EIA also said gasoline inventories rose, while distillate stockpiles declined for the same period.
Note: The market developments described reflect the data and statements available for the period referenced above.