Oil Rises Slightly, Market Awaits Outcome of Trump-Xi Summit on Iran
Oil prices rose slightly on Thursday (May 14), as the market awaited developments from the meeting between US President Donald Trump and Chinese President Xi Jinping, which is being monitored to see if it could yield positive steps toward resolving the Iran war. Investors' primary focus is on whether China is willing to play a more active role in encouraging Tehran to negotiate with Washington, although some analysts doubt Xi will put too much pressure on Beijing's longtime strategic partner.
Brent crude rose 45 cents, or 0.43%, to US$106.08 per barrel at 07:14 GMT, while WTI added 41 cents, or 0.41%, to US$101.43. These gains came after both benchmark contracts fell on Wednesday, amid growing concerns about a potential US interest rate hike, coupled with rising energy prices that could exacerbate inflationary pressures.
At the start of the two-day summit on Thursday, Xi told Trump that trade talks were progressing, but he also warned that differences over Taiwan could push relations in a dangerous direction. Xi's comments, as reported by Xinhua, shape market expectations regarding the broader direction of the discussion, including geopolitical issues that directly impact energy supply risks.
Several analysts believe the market is still in a "wait-and-see" mode and could be placing too much hope on a possible breakthrough in US-China talks regarding the Iran conflict. At the same time, the Strait of Hormuz, a key energy route, has remained largely shut since the outbreak of war in late February, and the lack of progress in reopening the route is seen as narrowing US policy options. Iran is also said to be tightening control over the strait, while recent data shows tanker movements remain severely restricted.
On the fundamental side, the International Energy Agency (IEA) warned that global oil supply this year is expected to be in deficit relative to demand as the war disrupts Middle East production and depletes inventories at an unusually rapid pace, reversing previous projections that predicted a surplus.
Source: Newsmaker.id
