Shafaq News
Oil prices eased on Wednesday after U.S. President DonaldTrump again asserted the war with Iran will end "very quickly",though investors remain wary about the outcome of peace talks amid continueddisruptions to Middle East supply from the conflict.
Brent crude oil futures fell 88 cents, or 0.8%, to $110.40 abarrel by 0410 GMT, while U.S. West Texas Intermediate futures were down 67 cents,or 0.6%, to $103.48.
"Benchmark prices softened on a potential deal as themarket gauges the geopolitical outcomes," said Emril Jamil, a senior oilresearch analyst at LSEG.
"However, prices are likely to still exhibit someupside potential even if a deal is concluded, given that supply will likely notreturn to pre-war levels immediately," he said.
Both benchmarksfell nearly $1 on Tuesday after U.S. Vice President JD Vance said the U.S. andIran had made progress in talks, with neither side wanting to see a resumptionof military action.
"Investors are keen to gauge whether Washington andTehran can actually find common ground and reach a peace agreement, with theU.S. stance shifting daily," said Toshitaka Tazawa, an analyst at FujitomiSecurities.
"Oil prices are likely to remain elevated given thepossibility of renewed U.S. attacks on Iran and expectations that, even if apeace deal is reached, crude supply will not quickly return to pre-warlevels," he said.
Despite Trump's assertion to U.S. lawmakers late on Tuesdayabout a quick end to the conflict, he earlier said the United States may needto strike Iran again and he had been an hour away from ordering an attackbefore postponing it.
His comments on the needto strike again came a day after he said he had paused a planned resumption ofhostilities following a new proposal by Tehran to end the U.S.-Israeli war.
Trump also said Iran's leaders are begging for a deal andwarned a new U.S. attack would happen in coming days if no agreement was reached.
Citi on Tuesday said it expects Brent crude to rise to $120a barrel in the near term, stating that oil markets are under-pricing the risk of a prolonged supplydisruption and broader tail risks.
Some tankers have recently managed to cross through theStrait of Hormuz though the number of shipments remain well below the 130 or soships that typically transited before the war.
Two Chinese supertankers carrying 4 million barrels ofMiddle East crude oil exited the Strait ofHormuz on Wednesday, after waiting in the Gulf for more than two months.
To make up the shortfall in global supplies from the war,countries are relying on their commercial and strategic inventories.
In the U.S., crude oil inventories fell for a fifth straightweek last week, according to marketsources citing American Petroleum Institute data released on Tuesday, whilefuel stocks also fell.
U.S. crude stockpiles reported by the Energy InformationAdministration are expected to have fallen by about 3.4 million barrels in theweek to May 15, according to a Reuters poll. The weekly EIA data is due lateron Wednesday.
(Reuters)
Only the headline is edited by Shafaq News Agency.