Brent slides as Trump signals potential US-Iran peace deal
The front-month ICE Brent contract has declined by $5.67/bbl on the day, to trade at $86.54/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
Brent crude’s price has felt some upward pressure, following weekly US crude inventory reports that indicated a substantial decline.
Commercial US crude oil inventories decreased by 7.2 million bbls to 426.5 million bbls in the week ending 5 June, according to data from the US Energy Information Administration’s (EIA).
“This [EIA report] is the seventh consecutive week of declines,” two analysts from ING Bank noted.
The American Petroleum Institute (API) reported an even larger draw of 9.1 million bbls during the same week.
A decline in US crude stocks indicates tightness in the oil market and has put some upward pressure on Brent's price.
“Commercial [US] crude oil inventories stand at a little over 426m barrels [426 million bbls], around 5% below the seasonal 5-year average,” ING Bank’s analysts said.
Downward pressure:
Brent crude’s price has plunged by more than $5/bbl following remarks by US President Donald Trump, indicating that the time and place to sign a US-Iran peace deal will be “announced shortly”.
The US President said he is halting hostilities in the Middle East region as Washington prepares to announce that details regarding a potential US-Iran peace deal soon.
“There does appear to be more positive noise around the deal this time, not just from the US, but also from other parties involved in the negotiations,” ING Bank’s analysts said.
Saudi Arabia-led oil producers group OPEC has slashed oil demand growth forecast once again, as the ongoing conflict in the Middle East continues to reshape energy consumption patterns.
The Organization of the Petroleum Exporting Countries (OPEC) has cut its global oil demand growth projection for 2026 to about 1.0 million b/d – around 200,000 b/d lower than its previous estimate.
“Most other agencies forecast a contraction in demand this year amid supply disruptions in the Middle East,” ING Bank’s analysts added.
By Aparupa Mazumder
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