Oil Prices Retreat, Market Eyes Iran Ceasefire and US-China Agenda
Oil prices weakened on Wednesday (May 13), snapping a three-day rally, as market participants awaited developments on the fragile Iran ceasefire and prepared for this week's US-China summit.
Brent fell US$1.22 (1.1%) to US$106.55 per barrel, while WTI fell US$1.16 (1.1%) to US$101.02 at 0410 GMT. Despite the corrections, both benchmarks have remained around or above US$100 since the US and Israeli attacks on Iran in late February and Iran's tightening of restrictions on the Strait of Hormuz.
Supply uncertainty remains a key price anchor. The market is highly reactive to any updates from the Middle East, given the risk of disruption to oil flows if tensions escalate or there is a direct threat to shipping routes.
Focus is also on US-China diplomacy, with Trump and Xi meeting in Beijing on Thursday-Friday and China's position as the largest buyer of Iranian oil. Several analysts believe the scale of the supply disruptions has the potential to keep prices high, while tensions over the prospect of reopening the Strait of Hormuz continue to influence sentiment.
On the demand side, interest rate and inflation pressures are again being considered, as high borrowing costs risk restraining energy consumption. Market participants are also closely monitoring US inventory data, after market sources cited the API as showing crude oil stocks fell for the fourth consecutive week, and distillate stocks also declined. (asd)*
Source: Newsmaker.id
