Oil Fluctuations Fueled by Uncertainty Over US-Iran Deal
Oil prices fluctuated on Friday (May 22), as traders assessed the prospects for a peace deal to end the war between the US and Iran.
West Texas Intermediate (WTI) rose slightly to $97.51 per barrel, while Brent crude for July delivery rose 1.6% to $104.23 per barrel in New York morning trading. These gains came as Asim Munir, Pakistan's military chief of staff and the main mediator between Washington and Tehran, headed to the Iranian capital, according to a Pakistani security official.
Iran stated that the latest US proposal had partially bridged the differences between the two sides, but comments from the Supreme Leader regarding uranium storage in Tehran and the dispute over levies in the Strait of Hormuz raised uncertainty about the extent of the agreement. Conflicting statements on key issues made it difficult for the market to assess whether the two sides were truly closer to a deal after threats of escalation in recent days.
Conflict and supply cuts have caused global oil and energy product stocks to decline at record levels, according to Goldman Sachs Group Inc. The International Energy Agency (IEA) remains ready to release additional reserves if needed, having made its first release in March, Executive Director Fatih Birol said on Thursday.
Meanwhile, US consumers are still feeling the impact of energy inflation. Gasoline prices reached $4.55 per gallon on Thursday, according to the American Automobile Association, the highest in four years before Memorial Day. Surveys also showed consumer sentiment falling to its lowest level, while long-term inflation expectations worsened, adding to pressure on people's purchasing power.
Key factors being monitored include developments in US-Iran negotiations, the status of the Strait of Hormuz, global oil prices, and their impact on inflation and consumer sentiment. (Arl)*
Source: Newsmaker.id
