Oil Rebounds After 2-Day Slump As Traders Weigh Iran-Israel Ceasefire, US Inventory Data
Synopsis
Brent crude was up 1% at $66.88 per barrel at 9.30 GMT while U.S. West Texas Intermediate crude advanced 1.4% at $65.24 per barrel.
Oil prices gained on Wednesday after two days of sell-off as investors evaluated the ceasefire between Israel and Iran, amid signs of demand improvement and rate cuts by the Federal Reserve.
Brent crude was up 1% at $66.88 per barrel at 9.30 GMT after falling over 13% over the past two sessions, while U.S. West Texas Intermediate crude advanced 1.4% at $65.24 per barrel. Oil prices had briefly surged to five-month highs on Monday after the U.S. joined the conflict by bombing three of Iran’s nuclear facilities.
Israel and Iran have avoided striking each other since U.S. President Donald Trump publicly criticized the two countries, which have been firing missiles and drones at each other ever since Israeli Prime Minister Benjamin Netanyahu ordered air strikes at Iran’s nuclear facilities on June 12.
"While concerns regarding Middle Eastern supply have diminished for now, they have not entirely disappeared, and there remains a stronger demand for immediate supply," ING analysts said, according to a Reuters report.
While the U.S. government data on domestic crude and fuel stockpiles will be released on Wednesday, the American Petroleum Institute has estimated that the crude stockpile fell by about 4.3 million barrels last week.
There is also growing optimism that the Federal Reserve will soon lower interest rates, following U.S. data showing consumer confidence has tapered off amid tariff threats. Rate cuts tend to boost oil demand.
Retail sentiment on Stocktwits about United States Oil Fund (USO) was still in ‘bullish’ territory. According to a CNBC report, citing FactSet data, more than 50.6 million shares of USO changed hands on Monday, the largest trading volume since 2020.
The United States Oil Fund and the ProShares Ultra Bloomberg Crude Oil (UCO) have fallen about 5% and 19.7%, respectively.
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