Oil Prices Tend to Be Steady at the Start of the European Session, Amid Deal Hopes and IEA Projections
Oil prices held steady on Wednesday morning, near their lowest levels in three months, as investors weighed the impact of the interim agreement between the United States and Iran and the International Energy Agency's (IEA) warning of a potential global oversupply in 2027. Brent crude traded at $78.98 per barrel on Wednesday (June 17), while West Texas Intermediate was at $76.08 per barrel.
On Tuesday, both oil benchmarks fell by around five percent due to optimism that the US-Iran deal would allow oil to flow again through the crucial Strait of Hormuz. PVM Oil analyst Tamas Varga stated that the gradual reopening of the Strait of Hormuz would significantly impact the oil supply balance.
The IEA estimates that global supply will increase by around eight million barrels per day by 2027, while demand will only increase by two million barrels per day. However, in the short term, the US-Iran deal provides an opportunity to replenish dwindling inventories or build new strategic reserves.
This interim agreement, which has not been publicly released, extends the ceasefire agreed in April for an additional 60 days, allowing for talks toward a permanent ceasefire. However, some analysts say that full restoration of production and refining capacity is likely to take months or years.
Regional tensions remain, with Israel deviating from the April ceasefire and the latest US-Iran deal. An Israeli drone incident in southern Lebanon killed several people and prompted public criticism from President Donald Trump.
The impact of this agreement is starting to show in price forecasts. Goldman Sachs lowered its Brent price forecast for the fourth quarter of 2026 to $80 per barrel from $90 per barrel, citing lower upside risks.
Meanwhile, data showed that Chinese crude throughput fell 9.1% in May compared to a year earlier, indicating that refineries are beginning to draw down inventories due to the Iran conflict. In the US, the American Petroleum Institute (API) report showed crude oil inventories fell by 8.3 million barrels in the week ending June 12, exceeding expectations for a draw of 4.6 million barrels. Official EIA data is scheduled for release at 10:30 a.m. ET. (asd)
Source: Newsmaker.id
