Oil Steady, Iran Deal Optimism Stalled by Lebanon Drama
Oil prices held steady on Friday (June 5th) after recording their first decline this week, as optimism over US-Iran peace talks clashed with uncertainty over the Israel-Lebanon ceasefire. Brent traded around US$95/barrel after falling 2.8% on Thursday, while WTI hovered just below US$93/barrel.
The market received a boost from President Donald Trump's statement that talks with Iran were progressing well, despite Tehran's backed Hezbollah rejecting the US-brokered Israel-Lebanon ceasefire agreement. This situation kept the market on hold: the peace headlines weighed on risk premiums, but the reality on the ground remained fragile and volatile.
On a weekly basis, WTI remained up more than 6% as uncertainty over progress in negotiations eroded initial optimism that a deal would quickly restore oil flows through the Strait of Hormuz. This route typically carries about a fifth of global oil and LNG in normal times. However, oil contracts are still down about a fifth since early April, when the US and Iran briefly agreed to a ceasefire that halted more than five weeks of fighting.
Analysts believe the significant decline from pre-ceasefire peaks is the “easy part” because the market is relieved that a major war has not broken out and the region’s oil infrastructure is relatively safe. Further declines now depend on a more difficult outcome: a real recovery in Hormuz shipping volumes, not just political statements.
Meanwhile, there have been no signs of new progress in US-Iran negotiations, and Israel’s attack on Lebanon remains a major sticking point. Trump even wrote that he was “in the middle of final negotiations” to end the war with Iran, but without providing details. In morning Asian trading, August Brent rose 0.1% to US$95.16/barrel, while July WTI fell 0.2% to US$92.90/barrel. (asd)*
Source: Newsmaker.id
