Oil prices experienced a modest uptick. This occurrence can be attributed to robust demand within the United States. Investors are exercising caution in light of the ceasefire between Iran and Israel. U.S. crude inventories declined more than anticipated. Gasoline stocks experienced an unforeseen decline. OPEC+ may accelerate its output increase ahead of the previously established timeline. Donald Trump stated that the Iran-Israel conflict has concluded.
Oil prices experienced a modest increase, building on the previous day’s gains, as a larger-than-anticipated reduction in U.S. crude inventories indicated robust demand. Meanwhile, investors maintained a cautious stance regarding the ceasefire between Iran and Israel, as well as the overall stability in the Middle East. Brent crude futures increased by 12 cents, representing a 0.2% rise, reaching $67.80 a barrel as of 0030 GMT. U.S. West Texas Intermediate crude increased by 20 cents, or 0.3%, reaching a price of $65.12. Both benchmarks experienced an increase of nearly 1% on Wednesday, rebounding from losses earlier in the week following data that indicated robust U.S. demand.
“Some buyers are favouring solid demand indicated by falling inventories in U.S. weekly statistics,” stated Yuki Takashima, an economist at Nomura Securities. “However, investors continue to exhibit apprehension, looking for clarity regarding the Iran-Israel ceasefire,” he stated, noting that market focus is now transitioning to OPEC+ production levels. Takashima forecast WTI is expected to revert to the $60-$65 range, which reflects its levels prior to the conflict.
Last week, U.S. crude oil and fuel inventories experienced a decline, attributed to an increase in refining activity and demand, according to the Energy Information Administration (EIA) report released on Wednesday. Crude inventories experienced a decline of 5.8 million barrels in the week concluding June 20, according to the EIA, surpassing analysts’ forecasts in a Reuters poll which anticipated a draw of 797,000 barrels. Gasoline stocks experienced an unanticipated decline of 2.1 million barrels, contrasting with projections that indicated a 381,000-barrel increase. This decline coincided with gasoline supplied, serving as an indicator of demand, reaching its peak since December 2021.
On Saturday, Igor Sechin, the head of Russia’s largest oil producer Rosneft, indicated that OPEC+, which encompasses the Organization of the Petroleum Exporting Countries and its allies including Russia, might advance its output increases by approximately one year from the original schedule.
In the meantime, U.S. President Donald Trump praised the rapid conclusion of hostilities between Iran and Israel, indicating that Washington is expected to pursue a commitment from Tehran to abandon its nuclear aspirations during discussions with Iranian representatives in the coming week. On Wednesday, Trump reiterated that the U.S. has not relinquished its maximum pressure strategy on Iran, which encompasses limitations on Iranian oil sales. However, he indicated a possible relaxation in enforcement measures to assist the nation in its rebuilding efforts.