By Katya Golubkova TOKYO, April 15 (Reuters) - Oil prices fell for a second day on Wednesday on expectations peace talks between the U.S. and Iran may resume and eventually release supply from the key
Oil prices edge up as Hormuz shipping constraints counter US-Iran peace hopes
Market Reactions and Economic Impact
By Scott DiSavino
NEW YORK, April 15 (Reuters) - Oil prices edged up about 1% on Wednesday as the market focused more on Middle East supply disruptions than on comments by U.S. President Donald Trump that the war on Iran was close to over.
Trump told the world to brace for an "amazing two days," as the army chief of mediator Pakistan arrived in Tehran in a bid to prevent renewed conflict.
Brent futures rose $1.14, or 1.2%, to $95.93 a barrel at 12:02 p.m. EDT (1602 GMT), while U.S. West Texas Intermediate crude rose $1.19, or 1.3%, to $95.93.
Strait of Hormuz Shipping Constraints
Forty-five days after Iran's Revolutionary Guards declared the strait closed, effectively shutting in about 20% of global oil and LNG shipments, transit through it remains at only a fraction of the 130-plus daily crossings before the war, sources said.
The U.S. has enacted a blockade of shipping leaving Iranian ports that its military said has completely halted trade going in and out of the country by sea.
Tankers and Market Premium
"Recent tracking data shows a small but increasing number of tankers moving through the Strait of Hormuz, even as overall traffic remains sharply below normal levels," analysts at energy consulting firm Gelber & Associates said.
"The result is a market that is no longer pricing a full-scale outage, but still holding a residual premium as flows recover unevenly rather than snapping back to normal," the Gelber analysts added.
Global Economic and Political Responses
International Finance Ministers' Concerns
WORLD COPING WITH SUPPLY DISRUPTIONS
Finance ministers from almost a dozen countries led by Britain called on the U.S., Israel and Iran to implement their ceasefire in full and said the conflict would weigh on the global economy and markets even if it was resolved soon.
U.S. Economic Outlook and Fed Politics
Treasury Secretary Scott Bessent said the U.S. economy will be slower this quarter, but it is in good shape and will rebound, adding that oil prices do not appear to be weighing on inflation expectations.
Adding to economic uncertainty, Trump threatened to fire Jerome Powell from his separate seat on the U.S. central bank's Board of Governors if the Federal Reserve chair does not vacate that post as well when his term as Fed chief ends on May 15.
Interest Rates and Inflation Risks
Analysts worry that involving more politics in interest rate decisions could reduce the Fed's ability to control inflation. Trump wants the Fed to cut rates, which would reduce consumer costs and could boost economic growth and demand for oil.
Higher oil prices could lead to a rise in consumer inflation expectations, Chicago Fed Bank President Austan Goolsbee told the Financial Times in an interview, adding the U.S. central bank faces a double danger from the Iran war and Trump’s tariffs.
Global Fiscal Strains and Energy Security
The war in the Middle East has intensified strains on an already fragile global fiscal situation, with higher interest rates and rising energy prices fueling calls for support from emerging markets and developing economies, the International Monetary Fund said on Wednesday in its Fiscal Monitor report.
Japan said it would establish a financial framework worth about $10 billion to help Asian countries procure energy resources and bolster their stockpiles.
Russia is ready to increase energy supplies to China ahead of an expected visit by President Vladimir Putin, Russian news agencies quoted Foreign Minister Sergei Lavrov as saying.
U.S. Oil Inventories and Market Data
U.S. OIL INVENTORIES
One factor supporting U.S. crude prices was the surprise U.S. Energy Information Administration report showing energy firms pulled 0.9 million barrels of crude from stockpiles during the week ended April 10.
That compared with a 0.15 million barrels build that analysts forecast in a Reuters poll and an increase of 6.1 million barrels that market sources said the American Petroleum Institute trade group reported on Tuesday. [EIA/S] [API/S]
(Reporting by Scott DiSavino in New York, Stephanie Kelly in London, Katya Golubkova in Tokyo and Emily Chow in Singapore; Editing by Peter Graff, Alexander Smith and Chris Reese)
