Oil settles up over USD2

Oil prices rose by more than USD 2 a barrel on Monday, according to Business Recorder, as supply concerns grew amid doubts about diplomacy aimed at ending the Iran conflict. Benchmark Brent closed at USD 90.87 after gaining USD 2.35, or 2.65%, while US West Texas Intermediate finished at USD 84.50, up USD 2.10. The gain followed President Donald Trump's remark that Washington was not pursuing a renewal of its memorandum with Iran and his call for Tehran to capitulate.

According to SEB Research's Bjarne Schieldrop, prices are unlikely to climb much further unless night-time crude flows through Hormuz stop or the Bab el-Mandeb Strait closes. Traders are balancing the chance of deeper shortages against a possible reopening of Hormuz that could send prices sharply lower, he said. A senior Iranian official told Reuters that Tehran could widen tensions in Hormuz and beyond if Washington did not fully carry out an interim peace deal within weeks.

Shipping through the strait slowed over the weekend, with five commodity vessels crossing on Saturday, none on Sunday and 31 the previous weekend, according to Kpler data. The US Strategic Petroleum Reserve shrank by roughly 5.3 million barrels last week to 293.4 million, the least since December 1982. Both contracts had gained over 5% in the previous week after attacks on tankers run by the Abu Dhabi National Oil Company and on a Saudi Aramco refinery.