Oil Rallies, Brent Nears $106 on Fragile US-Iran Ceasefire
Oil prices rose on Thursday as uncertainty surrounding the fragile ceasefire in the Middle East and concerns over potential supply disruptions continued to underpin the market.
Brent crude traded at $105.75 per barrel, up around 0.1% from the previous close of $105.63. US benchmark West Texas Intermediate (WTI) increased about 0.04% to $101.07 per barrel, compared with $101.02 in the previous session.
Markets are closely watching US President Donald Trump’s meeting with Chinese President Xi Jinping during Trump’s visit to China. In addition to trade and economic issues, the leaders are expected to discuss developments in the Middle East and the Taiwan issue.
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) said in its latest oil market report that the group’s crude production fell by 1.72 million barrels per day in April to 18.98 million bpd.
OPEC left its forecasts for global oil demand growth unchanged for this year and next year.
The group expects global demand to rise by 1.2 million bpd year-on-year to 106.33 million bpd in 2026, driven by an increase of 1.06 million bpd in non-OECD countries and 110,000 bpd in OECD economies.
For next year, OPEC projected global oil demand to increase by a further 1.54 million bpd to around 107.87 million bpd.
According to the International Energy Agency, global oil supply declined by 1.8 million bpd in April to 95.1 million bpd due to attacks on energy infrastructure in the Middle East and restrictions on tanker traffic through the Strait of Hormuz.
Separately, the US Energy Information Administration (EIA) said US commercial crude oil inventories fell by 4.3 million barrels last week to 452.9 million barrels, exceeding market expectations for a decline of around 2 million barrels.
US crude inventories fell more than expected last week, suggesting stronger demand and tighter supply conditions in the US oil market.
Analysts said geopolitical risks in the Middle East were heightening concerns over global oil supply, while a larger-than-expected draw in US crude inventories was lending further support to prices.
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