Oil News: Brent Leads WTI Higher as Tanker Traffic Nears a Standstill
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Key Points:
- WTI and Brent opened higher after U.S.-Iran talks failed again and Hormuz tanker traffic slowed to a near-standstill.
- Restricted Hormuz traffic keeps the oil market tight even as demand forecasts weaken and U.S. crude inventories build.
- Crude buyers rebuilt the supply premium after last week’s 5% rally as shipping through Hormuz failed to recover.
The deal that was supposed to take the risk out of crude oil does not exist. Weekend talks between the United States and Iran produced nothing while tanker traffic through the Strait of Hormuz slowed to a near-standstill. The market sold crude two weeks ago on hopes that diplomacy would reopen the waterway and those hopes just ran out of time. Buyers came back last week with both contracts gaining more than 5%, and Monday’s bid says they are not finished. The supply premium is back because the physical picture got worse over the weekend, not better.