Oil Fluctuates Awaiting Iran's Response
Oil prices fluctuated in trading on Thursday (May 21) as market participants awaited Iran's response to the latest US proposal, after a sharp 5.6% plunge on Wednesday amid hopes for a deal to reopen the Strait of Hormuz. Brent traded around $105 per barrel, while WTI was at $98.27.
According to the Iranian Students News Agency, Iran is responding to the US message, which has narrowed the gap to some extent. The surge in oil prices since the war began in February has exceeded 40%, but the market is starting to factor in the possibility of de-escalation, including a deal that would allow Iran to open a vital shipping lane and release millions of barrels of oil blocked in the Persian Gulf.
Global inventories of oil and related products have declined at a record pace this month, according to Goldman Sachs, while high US oil exports have helped maintain supplies on the international market. Early signs of flows through Hormuz have also reduced the risk premium in oil prices, with some supertankers attempting to navigate the waterway.
The transportation sector has also noted adequate fuel availability; European low-cost carrier EasyJet stated it is not facing any jet fuel supply issues for its summer schedule. US President Donald Trump warned of the possibility of further attacks if Iran rejects the terms of the peace deal, although he hopes that scenario does not occur.
Variables to monitor: developments in US-Iran negotiations, oil flows through the Strait of Hormuz, and global oil inventory data. (arl)*
Source: Newsmaker.id
