Oil Prices Decline on Fragile Peace Hope in Middle East
Oil prices are softer in the global commodity market on Thursday following reports of a ceasefire deal between Lebanon and Israel, which boosted hopes for a broader agreement to end the US-Israeli conflict with Iran that could potentially lead to a reopening of the Strait of Hormuz.
Brent crude traded at $96.99 per barrel, down around 0.8% from the previous close of $97.81 US benchmark West Texas Intermediate (WTI) decreased about 0.7% to $95.33 per barrel, compared with $96.02 in the previous session.
US president Donald Trump said talks with Tehran were continuing and that an agreement could be reached as soon as this weekend, while stressing that any deal would require Iran to forgo the development of nuclear weapons. He also said the Strait of Hormuz would reopen once an agreement is reached.
Additional pressure on prices came after The Wall Street Journal reported that Trump had privately told aides he would not end the ceasefire with Iran unless Tehran killed American troops, signaling a reluctance to re-escalate the conflict despite recent hostilities.
Iranian Foreign Minister Abbas Araghchi, however, said there had been no tangible progress in the negotiations, although communication channels with Washington remained open.
He said any return to the negotiating table would depend on guarantees for Iran’s rights, an end to the war in Lebanon and a broader de-escalation across the region.
Araghchi also said the US had witnessed Iran’s capabilities during the conflict and argued that Washington would not return to war if it acted rationally.
Meanwhile, reports that Israel and Lebanon had agreed on the implementation of a ceasefire further weighed on oil prices.
However, a sharp decline in US crude oil inventories limited downward pressure on prices by reinforcing expectations of strong fuel demand in the world’s largest oil consumer.
The US Energy Information Administration (EIA) said commercial crude oil inventories fell by about 8 million barrels last week to 433.7 million barrels.
Strategic crude oil reserves, which are excluded from commercial inventories, also declined by 8 million barrels to 357.1million barrels. Oil Prices Decline on Fragile Peace Hope in Middle East Wall Street, FTSE 100 Down on AI Stock Selloffs, Global Risk Aversion
