Oil Updates — crude rises more than 1% as investors assess Iran-Israel ceasefire, demand outlook
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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab News
2 hours ago
- Arab News
Closing Strait of Hormuz would hurt Iran's allies the most
Iran makes threats, but it will not act. It will not mine the Strait of Hormuz or block it by bombing passing ships. This scenario would backfire and primarily harm China — the largest buyer of Gulf oil, which would lose 4 million barrels a day. Iran's enemies — the Americans and Israelis — would be the ones to benefit because Beijing would adopt an angry stance toward Iran. When a cargo ship blocked the Suez Canal for just six days in 2021, the world was paralyzed — similar to what happened when the Houthis disrupted global maritime movement by targeting ships passing through the Bab Al-Mandab Strait. Therefore, closing the Strait of Hormuz would hurt Iran's allies the most. In the past, the Strait of Hormuz was a card used to blackmail the world. Today, it is no longer a strategic concern for the Americans, who have become nearly self-sufficient thanks to their own oil production and that of neighboring Canada. What if Iran's goal in closing the strait was to choke its Gulf neighbors and pressure them without entering into military confrontation? These countries have been planning for such a dark day for decades. Even if the strait were completely closed for several months, they could absorb the losses with limited damage. If Iran were to act, such a move would drive up oil prices and cause harm to China and Iraq, primarily Abdulrahman Al-Rashed The biggest producer, Saudi Arabia, owns a pipeline that allows it to export through the Red Sea port of Yanbu. Its capacity is 5 million barrels per day — and it can be increased. This means it would not lose a single barrel from its market. The UAE also has the port of Fujairah, located beyond the Strait of Hormuz, through which it can export more than 1.5 million barrels a day. Then there is Qatar, the largest gas producer. Although it has no alternative sea routes, it can withstand several months of forced interruption thanks to its massive financial reserves. Kuwait and Bahrain will be affected, but their Gulf Cooperation Council partners can support them. The biggest Gulf loser would be Iraq — Iran's ally — as it exports nearly 3 million barrels per day through Hormuz. If it were deprived of its exports, it would not have the financial capacity to meet its obligations to its citizens or its external commitments. We know that Iran has repeatedly trained for the closure of the Strait of Hormuz through dedicated military drills. If it does act, it would drive up oil prices and cause harm to China and Iraq, primarily. The Gulf states have prepared for such a possibility by building export networks that bypass Hormuz Abdulrahman Al-Rashed Since the 1980s, the threat of closing the strait has been Tehran's card to intimidate both the Americans and the Gulf states. But yesterday's strategies are no longer effective today. The US has become the world's largest oil producer. China is the Gulf's biggest buyer. And the Gulf states have prepared for such a possibility by building export networks that bypass the bottleneck that is Hormuz. Tehran's other options to widen the scope of conflict remain dangerous for the region — and dangerous for itself. Each option is akin to a suicide mission that would threaten a regime long bent on domination and expansion. This may be its last chance. It must accept peaceful coexistence in the region and stay within its borders.
Al Arabiya
4 hours ago
- Al Arabiya
Kansas City Chiefs' Strategy To Expand UK Fandom: Cultural Connections And Mascot Diplomacy
In an offseason huddle at the NFL's London headquarters, the Kansas City Chiefs are drawing up a game plan to win over fans in a crowded UK market. They're getting input from the locals, and there's good news. 'There is something about that younger generation in the UK; specifically they are really into US sports at the moment,' says Louise Johnson, chief executive of marketing agency Fuse. 'There's a moment in time that you can really capitalize on.' For all the latest headlines, follow our Google News channel online or via the app. Chiefs executives visited London after the team added the UK to its list of countries in the NFL's global markets program, which puts teams in the driver's seat to increase fandom overall – as well as land commercial partnerships individually. A day that began meeting with local agencies in the NFL's glass-enclosed eighth-floor office overlooking Leicester Square ended along the banks of the Thames, where a Chiefs cab was the meeting point to surprise a local fan with a ticket giveaway. 'The UK is another puzzle piece in the larger globalization of the brand,' said Lara Krug, the team's chief media and marketing officer, echoing a franchise theme of becoming 'the world's team.' Krug led the team's delegation that included business, social media, and public relations representatives. Besides marketing agencies, they also met with NFL officials. The takeaways were clear for growing the Chiefs' fanbase. 'One, that 12-to-24 (aged) audience is where there is the biggest opportunity,' she told The Associated Press. '(They're) very much into the cultural part of the NFL and the Americana of it all.' Second, find creative ways to connect to local fans. The Chicago Bears did soccer-style jerseys last year for their London game. 'The league and the clubs have done a great job on growing the game,' Krug said. 'We see the opportunity of reaching more fans and doing it from a cultural lens.' Mahomes, Kelce, and KC Wolf. Expanding your fan base is much easier when your quarterback, Patrick Mahomes, is the face of the league and your star tight end, Travis Kelce, is dating global pop star Taylor Swift. Kelce was the UK's top-selling NFL jersey in 2024. The Chiefs have also played in five of the last six Super Bowls and won three of them. Still, there are eight other NFL teams with the same rights the Chiefs have in Britain – and six of them have been there longer. Social media content on platforms like TikTok and Instagram are crucial, especially because NFL fans in the UK over-index on daily social media use compared to other fans, the Chiefs said. But some old-school methods work, too. 'Hello, KC Wolf. We know mascots do really well in the markets; it becomes an ambassador,' Krug said. KC Wolf was on hand in Frankfurt, Germany, in 2023 when the Chiefs beat the Miami Dolphins 21–14. 'They'll soon be looking for multiple European-based mascots of our KC Wolf,' Krug said. 'That will be something that we launch later this year,' she said, 'so having KC Wolf show up in a few of our markets more frequently.' Meetings aside, being on the ground in London was helpful in other ways: Krug noted the long line at a Formula One promotion in the Lego store in Leicester Square. The Chiefs have experimented before. Last year, the team partnered with Hallmark – headquartered in Kansas City – on 'Holiday Touchdown: A Chiefs Love Story.' Going international. In the NFL's global markets program, Kansas City has rights in seven countries – only the Los Angeles Rams have as many. All but one – Mexico – of the Chiefs' markets are in Europe. The team added the UK, Ireland, and Spain this year. The team's brass believes the best way to gain fans in foreign markets is to play games there. The Chiefs won their only London game back in 2015. They are 3–0 overall in regular-season international games. Dublin, Madrid, and Berlin are all new host cities this season. The Chiefs will play internationally this season – but not in Europe. They open in Brazil on Sept. 5 when they face the Los Angeles Chargers in Sao Paulo. That's the first of seven international NFL games in 2025 – the most ever in one season – and Commissioner Roger Goodell wants to eventually get to 16 games per year. Goodell has also floated the idea of creating a European division and staging a Super Bowl outside the US. One theory is the league will package the international games into a billion-dollar rights deal. Team and league data show that the Chiefs are already popular internationally. They have the largest overall German-language social media following at nearly 150,000. For consumer products sales, the Chiefs rank No. 1 in the DACH region of Germany, Austria, Switzerland, and No. 2 in Mexico. In international Game Pass viewing, the Chiefs were the most-watched team in DACH and Mexico last season. NFL says UK still has room to grow. The Chiefs brought several British influencers to a game at Arrowhead Stadium last season. They included Formz, a Tottenham fan who raps Premier League weekly recaps and sings about heartbreak; he has 1 million followers on TikTok. 'The league saw significant growth in UK fandom last year,' said Henry Hodgson, the NFL's general manager for the UK and Ireland. Confidence is high enough that three teams – the Chiefs, Baltimore Ravens, and Green Bay Packers – applied for and were awarded UK rights starting this season, joining the six others already in the market. 'For now, we don't want to cap it,' Hodgson told the AP. 'We see the benefit of these teams being involved in the market. It's something that the NFL will monitor, not just in the UK but in all the markets that the global markets program exists in, and make sure that all of the clubs can be successful in all the markets they're in.' Eleven teams have rights in Germany. Mexico is next highest with ten.
Al Arabiya
4 hours ago
- Al Arabiya
Israel designates Iran central bank ‘terror organization': Minister
Israel's defense minister on Wednesday designated Iran's central bank a 'terror organization,' saying the move was aimed at halting financing for Iran-backed militant groups the day after a ceasefire between the two foes took hold. Minister Israel Katz 'signed a special order designating Iran's central bank, two additional Iranian banks (and) an Iranian armed forces-affiliated company... as terror organizations,' a statement from his office said. 'Part of Israel's broader campaign against Iran', the move aimed 'to target the heart of the Iranian regime's terror financing system, which funds, arms and directs terror throughout the Middle East', it added. Iran and Israel agreed a ceasefire on Tuesday ending 12 days of tit-for-tat strikes between the longtime foes. The two sides have been locked in a shadow conflict for decades, with Israel battling several Iran-backed groups in the region, including Hamas in the Gaza Strip since October 2023. Israel had said its bombing campaign, which began on June 13, was aimed at preventing Iran from acquiring a nuclear weapon, an ambition Tehran has consistently denied. 'We have concluded a significant phase, but the campaign against Iran is not over. We are entering a new phase based on the achievements of the current one,' the head of Israel's military Eyal Zamir said in a statement Tuesday.
