Oil Closes Mixed After Iran-US Deal Reports
Oil prices closed mixed on Thursday (May 28) after a volatile session, as market participants weighed conflicting reports on progress toward an agreement to extend the US-Iran ceasefire.
Brent crude's July contract—which expires on Friday—settled down 58 cents (0.6%) at US$93.71 per barrel. The more active Brent August contract was last up 72 cents at US$92.97 at 3:20 p.m. EDT.
WTI crude closed slightly higher by 22 cents (0.3%) at US$88.90 per barrel. This movement reflects a market that remains headline-driven after the past few sessions have been marked by a tug-of-war between hopes for an end to the three-month war and the reality of shipping flows through the Strait of Hormuz, which remain well below pre-war levels.
Reuters cited four sources as saying an agreement had been reached to extend the ceasefire for 60 days, after Axios first reported the news on Thursday. However, Reuters sources said the deal is still awaiting President Donald Trump's approval, while Tasnim news agency stated that the text of the MoU with the US has not been finalized or confirmed.
Early in the session, Brent and WTI rose more than 2% after the IRGC claimed to have targeted a US airbase in response to the US attack on Bandar Abbas. The initial surge then subsided as the market returned to focusing on the status of the deal and whether any implementation steps will actually open Hormuz, a key factor in lowering the supply risk premium.
Oil prices also came under pressure from official US data showing that the country's crude stockpiles fell by 3.3 million barrels last week, a sixth straight weekly decline but lower than the 4.1 million barrel decline predicted by analysts polled by Reuters.
US gasoline and distillate fuel stocks also fell.
The oil market remains more sensitive to Middle East headlines despite another large drop in US stockpiles over the past week, said UBS analyst Giovanni Staunovo.
Source: Newsmaker.id
