Oil Posts Modest Gains with Strait of Hormuz Situation Unclear

Dow Jones
08/19

1503 ET - Oil futures edge up in cautious trading as the market weighs conflicting reports of how much oil is getting through the Strait of Hormuz. "Extraordinary workarounds are compensating for a badly impaired shipping route," Siebert Financial's chief investment officer Mark Malek says in a note. "Alternative oil routes demonstrate impressive resilience, but resilience is not the same as excess capacity." Tanker relays and pipelines can buy time but don't replace unrestricted access through the strait, he says. U.S. government figures suggest considerably more oil is escaping the region than vessel-tracking data would seem to indicate, Malek adds. "When the official number and the observable number disagree by this much, the observable number usually wins the argument eventually." WTI settles up 0.5% at $84.94 a barrel and Brent rises 0.2% to $91.02.

 

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