Oil is poised to experience a weekly decline as concerns over diminishing supply risks in the Middle East wane. This week, oil prices exhibited a range of trends. The initial decline was attributed to news regarding a ceasefire between Iran and Israel. Concerns regarding supply risks in the Middle East have diminished. Nonetheless, there was an increase in prices on Friday. The rise was supported by increased fuel demand in the United States. Data suggested constrained crude oil inventories. A depreciated dollar further bolstered price support. Benjamin Netanyahu’s remarks contributed to a reduction in supply concerns.
Oil was poised for a decline this week, as the Iran-Israel ceasefire remained intact, alleviating worries regarding supply risks in the Middle East. However, prices experienced an uptick on Friday, driven by increased fuel demand in the United States due to the onset of the summer driving season. Brent crude futures increased by 34 cents, representing a 0.5% rise, reaching $68.07 per barrel. U.S. West Texas Intermediate crude increased by 33 cents, reflecting a rise of 0.51%, reaching a price of $65.57 per barrel.
The benchmarks were projected to decline approximately 12% for the week. Oil futures reached their lowest point in over a week on Tuesday following U.S. President Donald Trump’s announcement of a ceasefire agreement between Iran and Israel. On Thursday, oil prices experienced a slight increase, following the release of U.S. government data indicating a decline in crude oil and fuel inventories from the previous week, alongside a rise in refining activity and demand.
“The market is beginning to absorb the reality that crude oil inventories have unexpectedly tightened,” stated Phil Flynn, senior analyst with the Price Futures Group. Additionally bolstering oil prices, the dollar index fell to a three-year low following a report indicating that President Donald Trump intended to select the next Federal Reserve chief sooner than anticipated, thereby igniting renewed speculation regarding potential U.S. interest rate reductions. A depreciated dollar renders oil more affordable for those holding alternative currencies, thereby enhancing demand and bolstering prices.
Just prior to the conclusion of oil trading on Thursday, Prime Minister Benjamin Netanyahu remarked that the resolution of Israel’s conflict with Iran could yield prospects for peace that should not be overlooked, thereby alleviating apprehensions regarding ongoing supply uncertainties.