Commodity Market Sees 12% Weekly Drop in Oil Prices
The global commodity recorded about 12% drop in crude oil prices week on week as tensions between Iran and Israel began to ease as the two warring nations counted losses.
Oil prices experienced their steepest weekly decline since March 2023 on Friday, as fears of a prolonged supply shock from the brief Israel-Iran war faded after the cease-fire announcement.
The international benchmark Brent crude was trading at $66.98 per barrel on Friday, marking a drop of around 11.7% from last week’s closing price of $75.91. Similarly, the American benchmark West Texas Intermediate (WTI) traded at $65.16 per barrel, down approximately 11.6% from last Friday’s close of $73.72.
Brent prices had surged to near five-month highs on Monday as supply concerns intensified following US airstrikes on Iran’s nuclear facilities in Fordo, Natanz, and Isfahan.
US President Donald Trump said Iran’s key nuclear enrichment facilities had been completely destroyed, warning that Tehran must pursue peace or face much more severe attacks in the future.
The developments heightened concerns over potential oil supply disruptions in the region and increased risk perceptions surrounding the Strait of Hormuz, a key chokepoint for global energy trade
Prices plunged on Tuesday, hitting a one-week low after a cease-fire between Israel and Iran eased concerns over supply disruptions in the oil-rich Middle East. On Wednesday, oil prices inched higher as ongoing Israel-Iran tensions raised supply concerns and US inventory data pointed to strong demand.
Israeli Prime Minister Benjamin Netanyahu declared that the 12-day conflict had ended with Iran’s nuclear program being “dismantled,” warning of further strikes should Tehran resume its nuclear ambitions. “Iran will not have a nuclear weapon,” Netanyahu said in a video posted to social media.
Meanwhile, the American Petroleum Institute (API) reported a sharp 4.27 million-barrel decline in US crude stocks, well above expectations for a 600,000-barrel draw. On Thursday, prices extended their gains after a sharper than expected decline in US crude inventories signaled robust demand in the world’s top oil consumer.
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.
Despite the rebound, overall market sentiment remains cautious due to ongoing uncertainty over the durability of the ceasefire between Iran and Israel and broader regional stability in the Middle East.
On Friday, prices edged up again after US President Trump announced a trade deal with China and hinted at a potential agreement with India. He also renewed pressure on Federal Reserve Chair Jerome Powell to cut interest rates.
Elsewhere, the oil rig count in the US decreased by 6 this week, according to the latest data released by oilfield services company Baker Hughes on Friday.
The number of oil rigs, an indicator of short-term production in the country, fell to 432 for the week ending June 27. The number of US oil rigs dropped by 47 compared to one year ago. #Commodity Market Sees 12% Weekly Drop in Oil Prices New Tax Reform Bills: A New Dawn for Nigeria’s Economy and Citizens
