Oil Prices Up over US Demand Outlook, Middle East Tensions
Oil prices inched higher in the global commodity market on Thursday after a sharper-than-expected decline in US crude inventories signaled robust demand.
However, market sentiment remains cautious due to lingering uncertainties over the durability of the ceasefire between Iran and Israel and broader regional stability in the Middle East.
International benchmark Brent crude rose by 2.3%, trading at $66.91 per barrel at 09.50 a.m. local time (0650 GMT), up from $66.41 at the previous session’s close.
Similarly, US benchmark West Texas Intermediate (WTI) increased by about 2.3%, settling at $64.94 per barrel, compared to $64.50 in the prior session.
The US Energy Information Administration (EIA) reported that commercial crude inventories fell by 5.8 million barrels last week, dropping to 415.1 million barrels.
Analysts had anticipated a smaller drawdown of around 1.2 million barrels. This marks the fifth consecutive weekly decline in US crude stocks.
Gasoline inventories also decreased by roughly 2.1 million barrels, settling at 227.9 million barrels during the same period.
“The sustained inventory drawdowns in the US weekly data prompted some buyers to position themselves for strong demand. However, investors are still seeking clarity on the status of the Iran-Israel ceasefire,” said analysts.
Meanwhile, attention is turning toward production levels set by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, collectively known as OPEC+.
On Saturday, Igor Sechin, CEO of Russia’s top oil producer Rosneft, said the OPEC+ group may advance planned production increases by nearly a year.
With tensions between Iran and Israel easing, markets are refocusing on underlying fundamentals. US President Donald Trump welcomed the rapid de-escalation of hostilities, noting that upcoming talks with Iranian officials could include calls for Tehran to halt its nuclear activities.
Trump also reiterated that the US “maximum pressure” campaign, especially restrictions on Iranian oil exports, remains in place. However, he hinted that some flexibility in enforcement could be considered to support Iran’s reconstruction efforts.
