August Nymex WTI prices are trading narrowly lower Monday after ending Friday’s session $1.02 higher at $87.10 a barrel. The news on Sunday that Saudi Arabia and the United Arab Emirates had opened new pipelines bypassing the Strait of Hormuz, the shipping lane that Iran has repeatedly threatened to close, has not really made any major significant impact on the market as of yet. The new links are thought to more than double the total pipeline capacity bypassing the strait to 6.5mln barrels per day (b/d), or about 40% of the 17mln b/d that transits Hormuz. Abu Dhabi and Riyadh insist that the pipelines are not a direct response to Tehran’s threats, although market participants and scholars in oil perceive the measures to be clear counterweight. The pipeline, capable of transporting 1.5mln barrels a day of crude, is expected to have a regular flow of oil by August, according to Ali Rashad Al Jarwan, chief executive of Abu Dhabi Marine Operating Co. WTI retreated back from highs of $87.35 in Asia this morning, paring back to session lows of $86.58. The market is currently trading $86.85 a barrel.
EasyForexNews Research Team