Oil prices rose on Wednesday as investors assessed the effect of a fragile ceasefire between Iran and Israel. Despite the rise, prices remained near their lowest levels in recent weeks, given expectations that global crude supplies will not be seriously affected, reports „Reuters“, reports BTA.
Brent crude oil futures rose by $0.85, or 1.3%, to $67.99 a barrel, while U.S. WTI rose by $0.87, or 1.4%, to $65.24 as of 06:41 Bulgarian time. However, Brent remained at its lowest closing level since June 10 and WTI since June 5, before the Israeli attack on Iranian nuclear and military sites that began on June 13.
Prices jumped to five-month highs after the US airstrikes on Iranian nuclear facilities over the weekend, but fell after President Donald Trump announced a ceasefire.
“Global energy prices are stabilizing following the truce between Israel and Iran. Our energy strategists' base case remains driven by fundamentals - and they show ample global supply,“ analysts at JP Morgan said in a note to clients.
According to a preliminary assessment by US intelligence, Iran's nuclear capabilities have not been destroyed, but only temporarily delayed by several months. Meanwhile, Iranian and Israeli officials signaled that the air escalation has ended, at least temporarily, after Trump publicly criticized the ceasefire violations.
Analysts, however, warn that the truce remains fragile. However, as long as both sides refrain from attacking energy infrastructure or blocking shipping through the Strait of Hormuz, price pressure on oil markets will remain limited.
The Strait of Hormuz - a strategic waterway between Iran and Oman - is crucial to global energy security. Between 18 million and 19 million barrels of oil pass through it daily, or about a fifth of global consumption.
Investors are also watching the upcoming US government data on crude oil and fuel stocks. According to the American Petroleum Institute, U.S. crude oil inventories fell by 4.23 million barrels in the week to June 20, signaling a stable domestic market and potential support for prices.