By: Economy Middle East

Oil prices rose for a fourth consecutive session on Wednesday as investors assessed conflicting statements from Tehran and Washington over whether the Strait of Hormuz remains open to shipping.

As of 5:04 GMT, Brent crude futures gained 56 cents, or 0.62 percent, to $91.58 a barrel, while U.S. West Texas Intermediate crude added 64 cents, or 0.75 percent, to $85.58 a barrel.

Strait of Hormuz traffic slows as U.S.-Iran peace hopes fade
Oil prices settled at their highest levels in more than three weeks on Tuesday as optimism over a potential U.S.-Iran peace deal continued to weaken.

U.S. President Donald Trump said on Tuesday that Washington was not engaged in talks with Iran and maintained that the Strait of Hormuz was open, contradicting Tehran’s claim that the key shipping route remained closed.

A temporary ceasefire expired on Monday, while a senior Iranian official said that Iran was preparing to respond to the diplomatic deadlock. However, there were no reports of new strikes between the two sides on Tuesday.

Shipping traffic through the Strait of Hormuz slowed on Wednesday, with data showing that most shipowners were avoiding the strategic waterway amid uncertainty over whether a blockade had been lifted.

Investors await U.S. inventory data

In a bid to bypass the strait, Iraq’s cabinet on Tuesday approved mechanisms allowing Iraqi crude to be exported through specialized international and local companies and via several alternative outlets, according to the government. The new contracts will be valid for three months from September 1.

Meanwhile, two major Chinese shipping companies have halted oil tanker shipments through the Strait of Hormuz and Bab el-Mandeb due to the ongoing conflict in the Middle East. Instead, they are collecting oil cargoes from locations outside the Gulf.

As oil prices rise, investors await the U.S. Energy Information Administration’s official inventory report, due at 14:30 GMT. U.S. crude inventories are expected to have fallen by around 600,000 barrels in the week ended August 14.