Oil rebounds as Iran vows to keep enriched uranium

Oil prices rose on Wednesday, November 11, recovering from two-month lows. The move came after Iran's top security official said Tehran would not allow any enriched nuclear material to leave the country, which dimmed hopes of a quick deal to end the war. Brent futures settled up 1.39% at $92.76 a barrel, and U.S. West Texas Intermediate gained 0.57% to $86.53, Reuters reported via Euronext. Washington has said nuclear issues must be part of any initial negotiations aimed at ending the U.S.-Israeli war on Iran.cnbc.com+1

Tehran hardens its nuclear stance

Mohsen Rezaei, secretary of Iran's Supreme National Security Council, told Lebanon's Al Mayadeen TV that Iran "will not remove a single atom of enriched nuclear material." He also said Tehran had informed Moscow of the decision, Radio Free Europe/Radio Liberty reported. Russia has often been named as a possible home for Iran's stockpile. Rezaei called reports of a recent U.S.-Iran meeting in Qatar "pure lies" meant to push oil prices down. "We need the enriched material to design ships and submarines that work on nuclear energy," he said, according to The Economic Times. He also warned of consequences if the U.S. carries out new strikes.rferl.org+1

On Tuesday, prices had initially dropped more than $3 a barrel after U.S. officials played down the need for more military strikes. They pared losses after an Iranian official said no talks were under way. "Oil prices are being supported by fading hopes of an imminent de-escalation," UBS analyst Giovanni Staunovo said.cnbc.com

Shipping attacks persist in Hormuz

The danger to tankers has not eased. Data from the Washington Institute for Near East Policy showed that 37 ships were attacked in October, the most in any month since the war began in February. Iranian forces also attacked ship navigation systems on the Omani island of Didamar in the Strait of Hormuz. LSEG Oil Research said that even with a deal, higher flows through the waterway would depend on mine clearance, insurance costs and whether shipowners are willing to take the risk.finance-commerce.com

"Operational risks have not disappeared simply because diplomatic signals have turned more positive," said Simon-Peter Massabni of XS.com.

Prices still down for the month

Even after Wednesday's gain, Brent was down about 21% since the start of November and WTI about 17%, as traders priced in an end to the war. Supply has also improved. Data from Kpler showed that Middle East crude and condensate outages had fallen to about 3.8 million barrels per day, and Saudi and Iraqi output was back to pre-war levels. Market sources citing American Petroleum Institute data said U.S. crude stocks rose 9 million barrels last week. Official government figures are due Thursday, a day late because of the Veterans Day holiday.finance-commerce.com