Crude oil futures were largely steady during mid-morning trade in Asia Thursday after Iran’s latest comments about the geopolitical unrest in the Middle East as well as bearish US economic and crude stock data. At 11:38 am in Singapore (0338 GMT), front-month ICE Brent December crude futures was 3 cents/b (0.05%) higher from Wednesday’s settle at $57.72/b, while the front-month NYMEX November light sweet crude futures contract was up 17 cents/b (0.32%) at $52.81/b.
Iranian oil minister Bijan Zanganeh on Wednesday downplayed the market impact of last month’s attacks on critical Saudi Arabian oil infrastructure, which Riyadh has blamed on Tehran, but warned that any retaliation on Iran “will destroy all the region.” Iranian oil flows had seen no effect in the aftermath of the attack, “but these issues increase tension in the region,” Zanganeh said. “All of the countries around the Persian Gulf should try to stabilize the region and secure the Strait of Hormuz for free oil and other commodity transportation to international markets. I think all countries around the Gulf think unilateralism doesn’t work and increasing pressure on Iran cannot be a solution to stabilize the region.”
This comes at a time when supply risk premiums have been easing following the attacks on Saudi crude production on September 14. “Brent crude is now below the level seen before the attack on Saudi Arabia oil facilities,” ANZ analysts said in a note. While the comments from Iran certainly warns the market about the risk surrounding the Saudi attacks, market participants are more focused on demand and growth related concerns, analysts said.
“The market is clearly fixated on the potential impact of weak economic growth on oil demand, with supply side issues taking a back seat for the moment,” ANZ analysts said. A private jobs reports in the US showed that payrolls in September increased by a modest 135,000, a sign that hiring is slowing along with the broader US economy. Bearish data also emerged from last week’s US inventory data with US crude stocks for the week ended September 27 up 3.1 million barrels, data released by the US Energy Information Administration on Wednesday showed.