https://arab.news/nuee8
- Report says US strikes failed to destroy Iran’s nuclear sites
- Prices settled at multi-week lows in previous session
LONDON: Oil prices climbed more than 1 percent on Wednesday as investors assessed the stability of a ceasefire between Iran and Israel, while support also came from data that showed US demand was relatively strong.
Brent crude futures were up 99 cents, or 1.5 percent, at $68.13 a barrel at 12:02 p.m. Saudi time, while US West Texas Intermediate crude gained 94 cents, or 1.5 percent, to $65.31.
Brent settled on Tuesday at its lowest since June 10 and WTI since June 5, both before Israel launched a surprise attack on key Iranian military and nuclear facilities on June 13.
Prices had rallied to five-month highs after the US attacked Iran’s nuclear facilities over the weekend.
“Concerns about oil supply disruptions have declined,” said Giovanni Staunovo, commodity analyst at UBS. “The drawdown shows that demand is still holding up in the US, the trade tensions were not as bad as some were fearing.”
Industry data showed US crude inventories fell by 4.23 million barrels in the week ended June 20, market sources said, citing American Petroleum Institute figures on Tuesday.
Traders and analysts are also seeing some support from market expectations that interest rate cuts could happen soon in the US Lower interest rates typically spur economic growth and demand for oil.
“Fed Chair Powell’s first testimony to Congress (yesterday) has hinted at a slight chance of bringing forward the first rate cut of 2025 to July ... which should offer some form of floor on oil prices from the demand side,” said OANDA senior market analyst Kelvin Wong.
A slew of US macroeconomic data released overnight including on consumer confidence showed possibly weaker than expected economic growth in the world’s largest oil consumer, bolstering expectations of Federal Reserve rate cuts this year.
Futures point to nearly 60 basis points’ worth of easing by December.
On the geopolitical front, a preliminary US intelligence assessment said US airstrikes did not destroy Iran’s nuclear capability and only set it back by a few months, as a shaky ceasefire brokered by US President Donald Trump took hold between Iran and Israel.
Earlier on Tuesday, both Iran and Israel signalled that the air war between the two nations had ended, at least for now, after Trump publicly scolded them for violating a ceasefire.
As the two countries lifted civilian restrictions after 12 days of war — which the US joined with an attack on Iran’s uranium-enrichment facilities — each sought to claim victory.
“While concerns regarding Middle Eastern supply have diminished for now, they have not entirely disappeared, and there remains a stronger demand for immediate supply,” said ING analysts in a client note.
Oil prices will likely consolidate at around $65-$70 per barrel levels as traders look to more US macroeconomic data this week and the Fed’s rate decision, said independent market analyst Tina Teng.
Investors were also awaiting US government data on domestic crude and fuel stockpiles due on Wednesday.