Oil prices are falling on global markets: key factors
4 June 11:17
Oil prices are falling on Thursday, June 4, following a rise the previous day, with the market’s focus remaining on the situation in the Middle East. This is reported by "Komersant Ukrainian", citing “Interfax-Ukraine. “
August Brent futures on the London ICE Futures exchange were trading at $96.98 per barrel as of 8:04 a.m., down $0.83 (0.85%) from the previous session’s close. On Wednesday, the contract rose by $1.81 (1.89%) to $97.81 per barrel.
July WTI futures on the New York Mercantile Exchange (NYMEX) have fallen by $0.73 (0.76%) to $95.29 per barrel so far today. At the close of the previous session, their price had risen by $2.26 (2.41%) to $96.02 per barrel.
The U.S. State Department reported that Israel and Lebanon have agreed to observe a ceasefire following negotiations mediated by Washington and intend to “resume discussions on political and security issues during the week beginning June 22, with the aim of reaching a comprehensive agreement.”
Meanwhile, U.S. President Donald Trump stated that he is satisfied so far with the progress of negotiations with Iran regarding the resolution of the conflict. At the same time, when the White House chief spoke about the chances of reaching an agreement, he did not rule out either a positive or a negative outcome.
“Maybe nothing will come of it. Or maybe everything will go well, and then there is a chance of success by the end of this week,” he said.
Iranian Foreign Minister Abbas Arakchi confirmed that Iran’s contacts with the U.S. have not been interrupted. “
“Our contacts with the Americans have not been interrupted, but no progress has been made in the negotiations either,” he said.
Meanwhile, the U.S. House of Representatives on Wednesday passed a resolution aimed at forcing the U.S. president to halt strikes against Iran. This was the fourth attempt by lawmakers to limit Trump’s authority regarding Iran. The resolution will now be sent to the Senate for consideration.
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The oil market is likely to remain sensitive to geopolitical news and reports on progress in negotiations between the U.S. and Iran, according to Kudotrade analyst Konstantinos Chrysikos.
“Any real breakthrough and normalization of export conditions from Middle Eastern countries could push oil prices lower, but prolonged supply disruptions will provide support,” the expert wrote.
The International Energy Agency warned again earlier this week that global oil reserves could reach critically low levels during the summer peak demand period if the drawdown of reserves continues at the current pace.
“Oil stocks have provided the oil market with a kind of safety cushion,” ING analysts noted. “However, even if we see a rapid resumption of shipping through the Strait of Hormuz, the restoration of supplies will be slow and gradual. This suggests that reserves are likely to continue declining in the third quarter, creating upside risks for prices,” the bank’s research note states.
The U.S. Department of Energy reported yesterday that commercial oil inventories in the country fell by 7.974 million barrels last week. Analysts had forecast an average decline of 4 million barrels, according to Trading Economics.
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