Oil posted its biggest monthly gain since March as traders grappled with simmering global conflicts and threats to supply from the Persian Gulf to the Black Sea.
Brent’s most active contract settled up 1.2% near $88 a barrel while West Texas Intermediate rose 1% to settle below $85. US President Donald Trump said he’s losing confidence in Iranian negotiators in the latest sign that armed hostilities could drag on, further disrupting energy shipments from the Middle East. A series of attacks on ships loading oil at or nearby the Caspian Pipeline Consortium terminal in Russia’s Black Sea has also put upward pressure on prices.
All energy markets surged higher in July, with Brent, the global benchmark, posting a nearly 24% gain. Products such as diesel and natural gas also logged big increases. US major Chevron Corp. said it expects fuel-making margins to remain elevated as the global refining system struggles to keep pace with the scale of supply disruptions.
A fragile pause in hostilities between Washington and Tehran collapsed in July, the Yemen-based Houthis entered the fray adding a new layer of risk to shipments in the Red Sea. Saudi Arabian forces joined the US to strike Iran-backed groups in Iraq, while US oil stockpiles have also continued to draw down.
At the same time, considerable questions remain about the safety of exporting oil through the CPC, which handles much of Kazakhstan’s oil exports. European refiners rely heavily on those barrels. The CPC will continue oil operations after discussions on Friday about whether to indefinitely halt shipments, according to people familiar with the matter. Nobody has claimed responsibility for the spate of attacks, although Ukraine has attacked tankers in Russia’s Black Sea waters in the past.
“The world is getting tighter and using the US surplus of crude and products to balance, to the extent that the US is getting physically shorter barrels at a much stronger clip than a few weeks ago,” said Scott Shelton, energy specialist at TP IC Group Plc. “The bottom line is US balances on everything look more bullish.”
Still, while restoked fighting between the US and Iran continues to threaten shipping through the Strait of Hormuz, there are signs that the shuttling of barrels through the waterway has nonetheless picked up.
On the corporate front, ExxonMobil Holdings Corp. and Chevron reported blowout profits that they plowed back into debt reduction rather than huge buyback increases, a sign of Big Oil’s caution about how long war-driven price rallies will last. On Thursday, rival Shell Plc reported its second-highest quarterly profit on record, as the conflict in the Middle East fueled a boom in trading as well as refining.
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With assistance from Gabriel Levin.
This article was generated from an automated news agency feed without modifications to text.
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