Oil Ticks Up After Two-Day Plunge as Traders Assess Ceasefire
(Bloomberg) -- Oil rose — after posting the biggest two-day decline since 2022 — as traders assessed the Iran-Israel ceasefire and an industry report that pointed to another drop in US crude stockpiles.
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Brent crude rose 1% to almost $68 a barrel, after slumping 13% over the past two days. Following their brief war, Israel and Iran appeared to be observing the ceasefire brokered by US President Donald Trump, reducing risks to supplies from the region.
The dust is beginning to settle in a global oil market that has been on a wild ride this week, marked by the biggest daily price swing in almost three years. The rocky trading has been amplified by huge trading volumes in options markets, while the closely-watched oil futures curve has also returned to its pre-war levels.
Crude initially rose after the US bombed Iranian nuclear sites at the weekend, then got dragged sharply lower as the White House announced the truce between Tehran and Israel. Also on Tuesday, Trump gave China — Iran's biggest crude customer — the green light to carry on buying its oil, adding to the selloff.
That move appeared to undermine years of US sanctions against Tehran, though a senior White House official later signaled that curbs on Iran would remain.
'There is no longer any real fear of the conflict spreading,' said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. 'With Trump's comments on Iranian oil exports, downward pressure on oil prices is likely to continue.'
The OPEC+ alliance is due to hold discussions on July 6 to consider a further supply boost in August. Meanwhile, Trump's self-imposed deadline to reach trade deals with major US partners falls on July 9. Nations without an accord in place will face the so-called 'Liberation Day' tariffs.
US crude stockpiles dropped by about 4.3 million barrels last week, according to an estimate from the American Petroleum Institute, an industry group. Official data on holdings — which sank more than 11 million barrels in the prior week — are due to be released later on Wednesday.
--With assistance from John Deane.
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