Investing.com — Oil prices seesawed on Wednesday, nursing steep weekly losses, as hopes for an imminent deal to reopen the Strait of Hormuz were offset by attacks on Saudi oil tankers by Iran-backed Houthis in Yemen.
Meanwhile, U.S. government data showed an unexpected build in commercial crude oil inventories.
At 15:16 ET (19:16 GMT), expiring in October, the global oil benchmark, rose 0.2% to $79.54 a barrel, while expiring in September slipped 0.7% to $75.21 a barrel. The former had slid nearly 12% for the week, while the latter had slumped more than 11%. Get premium commodity market insights with InvestingPro subscription – at 55% off now
U.S. and Iran tout imminent Hormuz deal amid Houthi attacks
Axios reported that the U.S., Iran, and Oman were nearing an interim agreement to reopen the Strait of Hormuz, with Washington aiming to announce the deal on Wednesday.
Several U.S. officials, including President Donald Trump, asserted that such a deal was close.
“We’re moving along very nicely. We’ll find out. We’ll know in 48 hours, I would say,” Trump told reporters on Tuesday evening.
“A lot of progress has been made. They called me and they said, ’Please, let’s talk.’ They want to talk. The funny thing is, they never mention that…I think they’d be very smart to make a deal. We’ll see what happens,” he added.
Iran’s foreign ministry said talks between Tehran and Oman over the strait were ongoing. Spokesperson Esmaeil Baqaei said a joint statement was in a final review and drafting stage provided “some third parties” did not “obstruct work,” adding that the closing of the vital waterway was due to the “military aggression” of the U.S.
Iran’s state media said the U.S. would have to return to the commitments it made under an interim peace deal signed in June as a necessary condition for the reopening of the strait, citing comments made by deputy foreign minister for legal and international affairs Kazem Gharibabadi.
Any potential deal aims to restore navigation through the vital waterway, through which about one-fifth of global oil and liquefied natural gas flowed prior to the outbreak of the Iran war in late February. According to Kpler data, traffic through the chokepoint declined to just eight vessels on Tuesday.
Elsewhere, Yahya Saree, the spokesman of the Yemeni Armed Forces, said two Saudi oil tankers had been targeted with missiles, one off the coast of Yanbu, a key city for Saudi crude oil production, and the other in the Gulf of Aden.
Analysts flagged that traders have become accustomed to a recurring cycle of threats and pullbacks between the U.S. and Iran. Last weekend, Trump called off new strikes on Iran, after both sides exchanged days of air attacks that all but dismantled a previous framework ceasefire deal signed in June.
Commercial crude inventories show unexpected build
At home, data from the Energy Information Administration (EIA) showed U.S. commercial crude oil inventories excluding those in the Strategic Petroleum Reserve (SPR) increased by 2.5 million barrels in the week of July 31, an unexpected build compared to expectations of a draw of 1.5 million barrels.
The EIA also said total inventories in the SPR fell to 304.8 million barrels, the lowest level since July 1983. The decline is part of an agreement by the Trump administration to release 172 million barrels over four months from the facility in order to keep a lid on oil prices.
Total crude stocks including commercial and the SPR fell to 711.8 million barrels, the lowest since January 1984. Stocks at the Cushing, Oklahoma hub increased to 21 million barrels, just above tank bottoms, as per the EIA.
Ayushman Ojha and Scott Kanowsky contributed to this article