Crude Oil Prices Ease Ahead of Trump, Xi Meeting
Oil prices fell on Wednesday as investors monitored mixed signals surrounding tensions between the US and Iran and adopted a cautious stance ahead of a high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping in China.
International benchmark Brent crude traded at $106.63 per barrel, down around 1.1% from the previous close of $107.77. US benchmark West Texas Intermediate (WTI) decreased about 1.1% to $101.03 per barrel, compared with $102.18 in the previous session.
Analysts said persistent concerns over potential supply disruptions and ongoing uncertainty in the Middle East continued to support prices, making it difficult for investors to determine a clear market direction.
Although Brent crude gained more than 3% on Tuesday, fading hopes for a lasting ceasefire between the US and Iran weakened expectations for a full reopening of the Strait of Hormuz, a critical route for global oil shipments.
Trump’s remarks that the ceasefire with Iran is on “massive life support” further reduced expectations for a near-term easing of regional tensions.
His comments that Washington is considering expanding the previously launched but later suspended Operation Project Freedom to secure commercial shipping through the Strait of Hormuz also kept global energy supply security concerns in focus.
While Trump said he does not believe China needs his help to end the war with Iran, trade between Tehran and Beijing has continued despite mounting pressure on China, the largest buyer of Iranian oil.
Trump is expected to meet Xi in Beijing on Thursday and Friday for talks that are expected to focus on trade, Iran, and broader geopolitical tensions.
The prolonged conflict with Iran is also beginning to weigh on the US economy, with rising oil prices driving up gasoline costs and raising concerns over broader economic repercussions in the coming months.
Meanwhile, US Consumer Price Index (CPI) data pointed to mounting pressure from higher energy costs, further weakening risk appetite across global markets.
Consumer prices posted a strong increase for the second consecutive month in April, marking the highest annual inflation rate in nearly three years and fueling expectations that inflationary pressures could intensify further in the months ahead.
Analysts said the latest inflation data has complicated the US Federal Reserve’s policy outlook, reinforcing concerns that the central bank could maintain a more hawkish stance through the rest of the year.
Although higher interest rates are expected to weigh on oil demand by increasing borrowing costs and slowing economic activity, persistently high inflation and ongoing geopolitical tensions have reinforced investor expectations that energy prices are unlikely to ease significantly in the near term. Oil Market Rallies on Geopolitical Hiccups
