WTI Oil steadies above $85 as hopes of a Middle East peace agreement start to fade

Oil prices have picked up from two-month lows on Wednesday, as investors start to worry about the lack of progress on the negotiations to reach a peace deal in the Middle East. The US benchmark West Texas Intermediate (WTI) Oil has appreciated more than $2 from Tuesday’s lows and consolidates around $85.50 during the European session.

Investors' optimism about a peace agreement between Washington and Tehran is starting to deteriorate as the days go by without any relevant advance in the talks, while attacks on vessels attempting to cross the Strait of Hormuz continue. 

US officials maintain their optimistic view, pushing back the possibility of new attacks on Iran. Secretary of State Marco Rubio affirmed in a G7 meeting in Paris on Tuesday that ”there is no need for major combat operations” and President Donald Trump affirmed that he is keeping the war at “status quo”, although he warned that the US military is “locked and loaded”.

Attacks in the Strait of Hormuz continue

Meanwhile, the UK Maritime Trade Operations (UKMTO), an organisation surveying global sea trade, reported a new attack on an Oil tanker northeast of the coast of Oman on Tuesday, shortly after the US Defence Secretary, Pete Hegseth, affirmed that the US controls the Strait of Hormuz. Incidents of this sort have reduced Oil traffic to a trickle in a corridor that transported about 20% of global Oil supply before the war, boosting market fears of supply disruptions and keeping prices between 20% and 60% above pre-war levels for most of the last eight months.

Also on Tuesday, data from the American Petroleum Institute (API) revealed that Crude Oil stocks increased by 9 million barrels in the week ending November 6, against market expectations of a 1 million barrel drawdown and following a 5.2 million barrel decline in the previous week. These figures have contributed to limiting WTI Oil’s recovery.