WASHINGTON (dpa-AFX) - Crude oil prices have edged lower on Friday following two sessions of gains, with the renewal of U.S.-Iran re-escalation concerns offset by the International Energy Agency's forecast of a global crude surplus.
WTI Crude Oil for December delivery was last seen trading down by $0.08 (or 0.09%) at $88.66 per barrel.
After the U.S. midterm election results came in favor of Democrats, U.S. President Donald Trump did not reveal his plans on Iran until last Saturday.
After remarking on Sunday that a renewal of attacks on Iran was highly unlikely, on Wednesday, Trump stated that he saw positive momentum in the efforts to end the conflict.
Trump's observations came after Qatar's Prime Minister Mohammed bin Abdulrahman bin Jassim Al Thani met him in the U.S., reportedly carrying proposals from Iran.
Denying any negotiations between U.S. and Iran officials, either in Iran or Qatar, the Secretary of Iran's Supreme National Security Council Mohsen Rezaei remarked that the U.S. is spreading such lies with the intention of bringing down oil prices and reducing the pressure on the U.S. economy. Rezaei also asserted that Iran will never allow its enriched nuclear materials to be shipped outside of the country.
Rezaei also warned that Iran will strike back on distant American bases, including ones in Europe, if the U.S. recommences any aggressive tactics.
Investors continued to pin their expectations on a resolution to the crisis through diplomacy after the Wall Street Journal reported that U.S. Vice President JD Vance will hold face-to-face negotiations with Iran's hardliners and possibly arrive at a deal.
Hours later, Trump posted through Truth Social that the days of waiting for an agreement with Iran are over and now the U.S. does not need any deal with Iran. Trump also claimed that the U.S. is in possession of hundreds of billions of dollars of Iran's money and has also taken over the control of the Strait of Hormuz.
Recently, U.S. Treasury Secretary Scott Bessent was moved from his residence in Washington to a U.S. military base following threats against his life.
Yesterday in a telephone interview with Salem News, Trump warned that if Iran targets any U.S. official, it will not exist any longer.
Trump also admitted to possible future strikes on Iran to prevent Iran from threatening U.S. allies and maritime interests.
Since yesterday, the geopolitical risk premium on crude oil returned, lifting the prices.
Earlier today, Iran's Islamic Revolutionary Guards Corps claimed that it had targeted and destroyed a U.S. early-warning radar facility in Bahrain in response to an U.S. attack on a telecommunications tower in Iran's southern Sirik region, close to the Strait of Hormuz, yesterday.
However, denying this claim, U.S. Central Command stated that it intercepted and shot down two one-way attack drones launched by Iran towards Bahrain.
Economists are of the view that any breakthrough in the ongoing stalemate could trigger a significant sell-off and oil prices could return to pre-war levels. However, a prolonged standoff or any exchange of attacks could support bullish momentum.
In addition, analysts are worried about demand destruction and stagflation if crude oil prices continue to remain higher.
Observing that the global oil market is returning to a surplus, in its Oil Market Report today, the Paris-based International Energy Agency said it expects demand to rebound by about 2 million barrels per day in 2027 to 104.3 million bpd as supply chains normalize and economic activity improves despite the ongoing U.S.-Iran conflict.
The Saudi Arabia versus Houthi conflict continues to keep the Middle East tensions alive.
The U.N. Security Council passed a resolution urging Yemen's Iran-backed Houthi militant group to immediately halt its attacks on Saudi Arabia, which was welcomed by the Gulf Cooperation Council.
The high commissioner for human rights in the U.N. Volker Turk demanded the Houthis return the body of a U.N. staff member, Mohammed Ibrahim El-Shami, who died in their custody in Yemen.
The U.S. dollar index was last seen trading at 103.39, up by 0.22 (or 0.21%) today.
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