Oil prices rose nearly 1 per cent on Wednesday as data showed relatively strong demand in the United States and as investors assessed the stability of a ceasefire between Iran and Israel.
Brent crude futures appreciated by 54 cents or 0.8 per cent to trade at $67.68 a barrel while the US West Texas Intermediate (WTI) crude gained 55 cents or 0.9 per cent to sell at $64.92 per barrel.
Prices had faced a tumultuous week as tensions in the Middle East, rather than spiking prices, instead spooked the markets.
After US President Donald Trump announced the ceasefire on Tuesday, Brent settled at its lowest since June 10 and WTI ended at its lowest since June 5 on the reduced Middle East supply risk.
Oil prices had rallied after June 13, when Israel launched a surprise attack on key Iranian military and nuclear facilities.
Prices also hit a five-month high after the US attacked Iran’s nuclear facilities over the weekend.
This ceasefire effectively concluded a 12-day conflict sparked by Israeli airstrikes targeting Iranian nuclear sites and military installations, which prompted missile retaliation by Iran.
However, throughout the escalation, major oil infrastructure and critical choke points, particularly the Strait of Hormuz, remained untouched, moderating initial fears of significant supply disruptions.
Market analysts noted that concerns regarding Middle Eastern supply have diminished for now while there remains a stronger demand for immediate supply.
Support also came as crude oil inventories in the US fell by 5.8 million barrels during the week ending June 20, according to new data from the US Energy Information Administration (EIA) released on Wednesday.
The American Petroleum Institute (API) on Tuesday had estimated a 4.277-million-barrel drop for the week.
Gasoline (petrol) stocks fell by 2.1 million barrels as gasoline supplied, a proxy for demand, rose to its highest since December 2021, according to Reuters.
Some US macroeconomic data including data on consumer confidence, showed possibly weaker-than-expected economic growth in the world’s largest oil consumer, bolstering expectations of a Federal Reserve rate cut this year.
The market is betting that the US Central Bank could cut interest rates as soon as September, which would typically spur economic growth and demand for oil.