Oil Prices Slightly Correct, Market Monitors Direction of US-Iran Tensions and US Stockpile Data
Oil prices edged lower in early Asian trading on Thursday (February 19), after surging more than 4% in the previous session. Market participants are now reassessing whether US-Iran tensions will escalate into more serious supply disruptions, amid increased military activity in key oil-producing regions.
Brent futures fell 12 cents (0.2%) to $70.23/barrel, while WTI fell 8 cents (0.1%) to $65.11/barrel (as of 01:10 GMT). Both had previously closed up more than 4% and recorded their highest settlements since January 30, as the market reintroduced a "risk premium" for potential supply disruptions.
Nissan Securities Investment analyst Hiroyuki Kikukawa assessed that tensions between Washington and Tehran remain high, but the current dominant market view is that a full-scale conflict is relatively unlikely. He added that if military action does occur, the market expects it to be limited, while US President Donald Trump is also believed to be unwilling to see a sharp spike in oil prices.
On the diplomatic front, the White House said there had been some progress in the Geneva talks, but differences remain, and Tehran is expected to return with new details in the coming weeks. Meanwhile, Iran issued a notice of overflight (NOTAM) regarding a planned rocket launch in the south, while the US deployed warships near Iran, and US Vice President JD Vance said Washington was weighing the options of continuing diplomacy or pursuing "other options."
Sentiment was also influenced by other geopolitical factors: Russia-Ukraine peace talks in Geneva ended without a breakthrough, adding another layer of uncertainty to global energy markets. In Asia, trading conditions also tended to be thinner as several markets remained on the Lunar New Year holiday, making price movements more susceptible to headlines.
The next focus was on US oil inventory data. Market sources cited API data showing crude, gasoline, and distillate inventories fell last week—contrary to expectations from a Reuters survey that had expected crude stocks to rise. The market now awaits the official EIA report, which will be released Thursday, scheduled for a special time slot due to the US federal holiday: 12:00 PM & 2:00 PM ET (equivalent to Friday morning WIB, around 12:00 AM & 2:00 AM).
Going forward, oil's direction will potentially be determined by a combination of two triggers: US-Iran headline developments (which keep the risk premium "tacky") and EIA stockpile data (which could trigger a further rally if it indicates tighter supplies, or encourage profit-taking if stocks actually swell).
Source: Newsmaker.id
