Oil prices fell in Asian trade today after the announced ceasefire agreement between Israel and Lebanon fueled hopes for a quick end to the US-Israeli war against Iran, which could potentially lead to the opening of the Strait of Hormuz to shipping, Reuters reported, BTA reported.
Brent futures fell by 87 cents, or 0.89 percent, with a barrel selling for $96.92 as of 07:58 Bulgarian time. U.S. West Texas Intermediate (WTI) crude oil fell 78 cents, or 0.81 percent, to $95.24 a barrel.
Both crudes rose about 2 percent on Tuesday after renewed hostilities in the Middle East, including Iranian attacks on Kuwait and U.S. strikes near the Strait of Hormuz.
Israel and Lebanon announced early this morning that they had agreed to extend a ceasefire. Investors are hopeful that a deal will also be reached between Washington and Tehran. Iranian officials have made a partial cessation of hostilities between Israel and Lebanon a condition for concluding a peace agreement.
US President Donald Trump has hinted that progress could be made in talks with Iran as early as this weekend.
Iranian Foreign Minister Abbas Araghchi said that contacts between Tehran and Washington have not been interrupted, but that no progress has been made in the talks, adding that both sides are studying the exchanged texts.
In the US, the Republican-controlled House of Representatives approved a resolution last night to prevent Trump from continuing the war against Iran. To enter into force, the resolution also needs approval from the Senate. A two-thirds majority in both houses would be needed to override Trump's veto of the text.
Meanwhile, U.S. crude oil inventories fell by 8 million barrels to 433.7 million barrels in the week ended May 29, the Energy Information Administration (EIA) said.
A majority of analysts polled by Reuters had forecast a much smaller draw of 4 million barrels.
The International Energy Agency (IEA) has warned that global oil stocks could fall to critical levels before the peak of summer demand if they continue to be depleted at the current rate.