Oil market volatility continued unabated on Thursday (25 August) as benchmark futures headed higher, having retreated overnight on a stronger dollar and bearish US inventories data.
At 3:44pm BST, the Brent front month futures contract was up 0.51% or 25 cents to $49.30 per barrel, while West Texas Intermediate was up 0.19% or nine cents to $46.86, on the back of a sell-off in the previous session.
On Wednesday, the US Energy Information Administration said crude stockpiles rose by 2.5m barrels stateside to a total of 523.6m barrels in the week ending 19 August, contrary to a Reuters analysts' poll predicting a 455,000-barrel fall.
However, news that Iranian production had stalled sent the bulls out in force once again. According to the latest data published by the country's state oil company, production for July came in at 3.85m barrels per day (bpd), little changed from the 3.8m bpd noted in June.
Independently, the International Energy Agency's (IEAs) claim that Iran's production was actually closer to 3.6m bpd raised further doubts about Tehran's ability to realise its stated ambition of ramping up production to 4m bpd.
FXTM chief market strategist Hussein Sayed said: "Oil market fundamentals have been clearly ignored in August as price action was driven solely by verbal interventions; it remains to be seen whether this is going to be converted into actions.
"Another disappointing meeting similar to April's talks in Doha will not only lead to lower oil prices, but also threatens Opec's influence on prices going forward. The only major obstacle to reaching a deal has been the Saudi-Iranian conflict, and if they didn't manage to put political disagreements aside, I think it's going to be another disappointment in September."
Meanwhile, precious metals were dragged lower by gold, ahead of US Federal Reserve chairwoman Janet Yellen's speech at the annual Jackson Hole Symposium. With the markets expecting a mildly hawkish tone, Comex gold futures were 0.32% or $4.30 lower at $1,325.40 an ounce at 4:32pm BST.
Concurrently, silver futures fell 0.03% or a cent to $18.55 an ounce, while spot platinum was 0.23% or $2.45 lower at $1,076.89 an ounce.
Oanda's senior market analyst Craig Erlam said: "The Jackson Hole Symposium has often been used to warn about upcoming policy changes and whether that is the next hike or a more dovish Fed, we'll have to wait and see. After all the build up to the event, I wouldn't be surprised if Yellen once again keeps her cards very close to her chest and the whole things becomes something of an anti-climax."