Oil prices rose over 1 per cent yesterday, recovering from a sharp slide early this week, as data showed relatively strong US demand, and as investors assessed the stability of a ceasefire between Iran and Israel.
Brent crude futures were up 82 cents, or 1.2pc, at $67.96 a barrel yesterday afternoon. US West Texas Intermediate (WTI) crude was up 83 cents, or 1.3pc, to $65.20.
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.
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