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Business Times
10 hours ago
- Business
- Business Times
Oil prices drop 6% as Israel-Iran ceasefire reduces Middle East supply risk
[NEW YORK] Oil prices fell 6 per cent on Tuesday (Jun 24) to settle at a two-week low, on expectations the ceasefire between Israel and Iran will reduce the risk of oil supply disruptions in the Middle East. The ceasefire was on shaky ground with US President Donald Trump accusing both Israel and Iran of violating it just hours after it was announced. Brent crude futures fell US$4.34, or 6.1 per cent, to settle at US$67.14 a barrel. US West Texas Intermediate (WTI) crude fell US$4.14, or 6 per cent, to settle at US$64.37. Settlement was the lowest for Brent since Jun 10 and WTI since Jun 5, both before Israel launched a surprise attack on key Iranian military and nuclear facilities on Jun 13. 'The geopolitical risk premium built up since the first Israeli strike on Iran almost two weeks ago has entirely vanished,' said Tamas Varga, a senior analyst at TP ICAP's PVM Oil Associates brokerage and consulting firm. On Monday, both oil contracts settled down more than 7 per cent. They had rallied to five-month highs after the US attacked Iran's nuclear facilities over the weekend. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Direct US involvement in the war had investors worried about the Strait of Hormuz, a narrow waterway between Iran and Oman, through which between 18 million and 19 million barrels per day (bpd) of crude oil and fuels flow, nearly a fifth of global consumption. Prices also fell as Trump said China, the world's biggest oil importer, can continue to purchase oil from Iran. In other supply news, Kazakhstan's state energy company KazMunayGaz raised its forecast for oil output at the Chevron-led Tengiz oilfield, the country's largest, to 35.7 million tonnes in 2025 from 34.8 million tonnes expected previously. Kazakhstan is a member of the Opec+ group of countries that includes the Organization of the Petroleum Exporting Countries (Opec) and allies. Several other Opec+ members have also been increasing output. In Guyana, oil output rose to 667,000 bpd in May from 611,000 bpd in April, fuelled by increases at two of three production facilities operated by US major ExxonMobil. US economy and oil inventories Another factor weighing on oil prices came from US consumer confidence, which unexpectedly deteriorated in June as households increasingly worried about job availability and economic uncertainty from Trump's tariffs. US Federal Reserve Bank of New York president John Williams said he expects slower growth and higher inflation this year, due in large part to trade tariffs, in comments that suggested he was in no rush to cut interest rates, which could boost economic growth and oil demand. The American Petroleum Institute (API) trade group and the US Energy Information Administration (EIA) were due to release US oil inventory data, Analysts forecast energy firms pulled about 0.8 million barrels of oil from US stockpiles during the week ended Jun 20. If correct, that would be the first time energy firms pulled oil from storage for five weeks in a row since January. That compares with a build of 3.6 million barrels during the same week last year and an average decrease of 2.5 million barrels over the past five years (2020 to 2024). The API releases its numbers on Tuesday and the EIA on Wednesday. REUTERS
Business Recorder
13 hours ago
- Business
- Business Recorder
Oil prices drop nearly 6% as Israel-Iran ceasefire reduces Middle East supply risk
NEW YORK: Oil prices fell almost 6% to a two-week low on Tuesday on expectations the ceasefire between Israel and Iran will reduce the risk of oil supply disruptions in the Middle East. That ceasefire, however, was on shaky ground with U.S. President Donald Trump accusing both Israel and Iran of violating it just hours after it was announced. Brent crude futures fell $4.02, or 5.6%, to $67.46 a barrel at 1:26 p.m. EDT (1726 GMT). U.S. West Texas Intermediate (WTI) crude fell $3.84, or 5.6%, to $64.67. Brent was on track for its lowest settlement since June 10 and WTI for its lowest since June 6, both before Israel launched a surprise attack on key Iranian military and nuclear facilities on June 13. 'The geopolitical risk premium built up since the first Israeli strike on Iran almost two weeks ago has entirely vanished,' said Tamas Varga, a senior analyst at TP ICAP's PVM Oil Associates brokerage and consulting firm. On Monday, both oil contracts settled more than 7% down. They had rallied to five-month highs after the U.S. attacked Iran's nuclear facilities over the weekend. Oil falls 6pc The direct U.S. involvement in the war also focused investors on the Strait of Hormuz, a narrow waterway between Iran and Oman, through which between 18 million and 19 million barrels per day (bpd) of crude oil and fuels flow, accounting for nearly a fifth of global consumption. Prices also fell as Trump posted on social media platform Truth Social that China, the world's second biggest economy behind the U.S., can now continue to purchase oil from Iran. In other supply news, Kazakhstan's state energy company KazMunayGaz raised its forecast for oil output at the Chevron-led Tengiz oilfield, the country's largest, to 35.7 million metric tons in 2025 from 34.8 million tons expected previously, as it boosts output. Kazakhstan is a member of the OPEC+ group of countries that includes the Organization of the Petroleum Exporting Countries (OPEC) and allies. 'Prior to the outbreak of hostilities between Israel and Iran, we had been suggesting a bearish stance mainly due to increased OPEC+ production that has prompted ample crude supplies, an evolving dynamic that has intersected with expected demand deterioration largely due to the Trump tariffs,' analysts at energy advisory Ritterbusch and Associates said in a note. In Guyana, oil output rose to 667,000 bpd in May from 611,000 bpd in April, fueled by increases at two of the three production facilities operated by U.S. major Exxon Mobil. US oil inventories The American Petroleum Institute (API) trade group and the U.S. Energy Information Administration (EIA) were due to release U.S. oil inventory data, Analysts forecast energy firms pulled about 0.8 million barrels of oil from U.S. stockpiles during the week ended June 20. If correct, that would be the first time energy firms pulled oil from storage for five weeks in a row since January. That compares with a build of 3.6 million barrels during the same week last year and an average decrease of 2.5 million barrels over the past five years (2020-2024). The API releases its numbers on Tuesday and the EIA on Wednesday.
Globe and Mail
15-05-2025
- Business
- Globe and Mail
Oil slides 3% on expectations for U.S.-Iran nuclear deal
Oil prices fell by about $2 on Thursday on expectations for a U.S.-Iran nuclear deal that could result in sanctions easing, while a surprise build in U.S. crude oil inventories last week heightened investor concerns about oversupply. Brent crude futures were down $1.99, or 3 per cent, to $64.10 a barrel at 0806 GMT. U.S. West Texas Intermediate (WTI) crude futures were down $2.05, or 3.3 per cent, to $61.10. U.S. President Donald Trump said on Thursday that the United States was getting very close to securing a nuclear deal with Iran, and Tehran had 'sort of' agreed to the terms. This came after an Iranian official told NBC News in an interview published on Wednesday that Iran was willing to agree to a deal with the U.S. in exchange for the lifting of economic sanctions. 'Chased down by the crude build in the EIA Inventory Report, the move is accelerated by what appears to be a cooling of animosity in the US/Iran nuclear negotiations,' PVM Oil analyst John Evans said of oil prices. Washington issued sanctions on Wednesday to target Iranian efforts to domestically manufacture components for ballistic missiles, the U.S. Treasury Department said, following Tuesday's sanctions on some 20 companies in a network that it said has long sent Iranian oil to China. The sanctions came after a fourth round of U.S.-Iran talks in Oman aimed at addressing disputes over Iran's nuclear program. Data from the U.S. Energy Information Administration on Wednesday showed crude stockpiles rose by 3.5 million barrels to 441.8 million barrels last week, compared with analysts' expectations in a Reuters poll for a 1.1 million-barrel draw. Meanwhile, the International Energy Agency lifted its oil demand growth forecast in 2025 to 740,000 barrels per day, up 20,000 bpd from the previous report, citing higher economic growth forecasts and lower oil prices supporting consumption. The Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, has been increasing supply, although OPEC on Wednesday trimmed its forecast for growth in oil supply from the U.S. and other producers outside the wider OPEC+ group this year.
Business Recorder
15-05-2025
- Business
- Business Recorder
Oil slides 3% on expectations for US-Iran nuclear deal
LONDON: Oil prices fell by about $2 on Thursday on expectations for a U.S.-Iran nuclear deal that could result in sanctions easing, while a surprise build in U.S. crude oil inventories last week heightened investor concerns about oversupply. Brent crude futures were down $1.99, or 3%, to $64.10 a barrel at 0806 GMT. U.S. West Texas Intermediate (WTI) crude futures were down $2.05, or 3.3%, to $61.10. U.S. President Donald Trump said on Thursday that the United States was getting very close to securing a nuclear deal with Iran, and Tehran had 'sort of' agreed to the terms. This came after an Iranian official told NBC News in an interview published on Wednesday that Iran was willing to agree to a deal with the U.S. in exchange for the lifting of economic sanctions. Oil falls after US crude inventories rise 'Chased down by the crude build in the EIA Inventory Report, the move is accelerated by what appears to be a cooling of animosity in the US/Iran nuclear negotiations,' PVM Oil analyst John Evans said of oil prices. Washington issued sanctions on Wednesday to target Iranian efforts to domestically manufacture components for ballistic missiles, the U.S. Treasury Department said, following Tuesday's sanctions on some 20 companies in a network that it said has long sent Iranian oil to China. The sanctions came after a fourth round of U.S.-Iran talks in Oman aimed at addressing disputes over Iran's nuclear programme. Data from the U.S. Energy Information Administration on Wednesday showed crude stockpiles rose by 3.5 million barrels to 441.8 million barrels last week, compared with analysts' expectations in a Reuters poll for a 1.1 million-barrel draw. Meanwhile, the International Energy Agency lifted its oil demand growth forecast in 2025 to 740,000 barrels per day, up 20,000 bpd from the previous report, citing higher economic growth forecasts and lower oil prices supporting consumption. The Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, has been increasing supply, although OPEC on Wednesday trimmed its forecast for growth in oil supply from the U.S. and other producers outside the wider OPEC+ group this year.
