Sentiment was also influenced by the U.S. House of Representatives approving a resolution aimed at limiting President Donald Trump’s authority to continue military action against Tehran.
Crude oil price on June 4
Brent crude futures slipped 67 cents, or 0.69%, to $97.14 a barrel by 0015 GMT, while U.S. West Texas Intermediate crude fell 62 cents, or 0.65%, to $95.4 a barrel. The decline followed a strong rally in the previous session, when both benchmarks gained about 2%, extending Tuesday’s advances. Prices had moved higher after fresh tensions in the Middle East, including Iranian attacks on Kuwait and U.S. military strikes near the Strait of Hormuz.In Washington, the Republican-controlled House passed a resolution on Wednesday seeking to prevent Trump from continuing the war against Iran. However, the measure would still require Senate approval and two-thirds support in both chambers to override what is widely expected to be a presidential veto.
Trump said on Wednesday that negotiations with Iran could see progress as early as this weekend. Meanwhile, Iranian Foreign Minister Abbas Araqchi said contacts between Tehran and Washington remain open, though no headway has been made so far. He added that both sides are currently reviewing the texts exchanged during the talks.According to a Reuters report, Haitong Futures said oil prices could move toward the upper end of their trading range as a continuing supply-demand imbalance coincides with rapidly declining global crude inventories.Analysts note that even if a ceasefire is formally agreed upon, shipping activity through the Strait of Hormuz may take months to normalize. They added that any damage to energy infrastructure could further delay the recovery process.Last month, Saudi Aramco Chief Executive Officer Amin Nasser cautioned that disruptions in the Strait of Hormuz could postpone stability in global oil markets until 2027. He said prolonged disruptions could affect nearly 100 million barrels of oil supply every week. Saudi Aramco remains the world’s largest oil producer.
Morgan Stanley said the oil market is engaged in “a race against time,” warning that the factors that have helped prevent a sharper surge in crude prices may begin to fade if the Strait of Hormuz remains closed through June.
The brokerage said stronger U.S. crude exports and weaker demand from China have so far helped absorb part of the supply shock. However, it warned that a prolonged disruption to the key shipping route could tighten global oil supplies again if the outage lasts beyond the period during which the U.S. and China can offset the impact.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
-1024x768.jpg "Red Snapper Used as Cudgel by Fed Judge")
