Brent crude rises to $88.02
Weaker expectations surrounding the negotiation process between the United States and Iran drove prices higher in energy markets. Brent crude for October delivery rose as high as $87.93 per barrel the previous day before closing the session at $87.72.
At 9:15 a.m. today, Brent crude rose 0.34% from the previous close to reach $88.02 per barrel. At the same time, West Texas Intermediate crude for September delivery traded at $82.50 per barrel.
Tensions in the Strait of Hormuz remain in focus
The decline in hopes for an agreement between the United States and Iran to end the war and reopen the Strait of Hormuz contributed to the price movement. Risks emerging in the Strait of Hormuz and Bab el-Mandeb are expected to continue limiting energy flows and tanker shipping in the near term.
US President Donald Trump did not rule out the possibility of a major attack against 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 extremely difficult economic circumstances and could not even pay its own soldiers. He nevertheless said that Iran still had the military capacity to cause problems in the Strait of Hormuz.
"The Strait of Hormuz is currently open and the strait is completely under the control of our navy."
Trump said that only tankers authorized by the United States could pass through the strait, while other vessels were caught in the blockade.
Volatility expected in the oil market
High volatility in the oil market could continue for some time if neither side backs down in the negotiations between the United States and Iran. Brent crude is expected to move within a range of $75 to $95 per barrel.
From a technical perspective, $88.31 is being watched as resistance and $87.55 as a support level for Brent crude.
