Global oil prices climbed on Thursday after suffering steep losses in the previous session, as traders assessed the likelihood of a peace agreement being reached to ease tensions in the Middle East.
Brent Crude futures rose 78 cents, or 0.8 percent, to $102.05 a barrel in early trading, while West Texas Intermediate crude gained 76 cents, also 0.8 percent, to $95.84 a barrel.
The rebound came a day after both benchmarks tumbled more than 7 percent to two-week lows on optimism that diplomatic efforts between the United States and Iran could bring an end to the conflict that has shaken global energy markets since February.
However, market sentiment shifted after Donald Trump said it was still “too soon” for direct face-to-face talks with Tehran. An Iranian lawmaker also dismissed the latest US proposal, describing it as more of a wish list than a workable agreement.
Analysts said investors remain uncertain about whether negotiations will ultimately succeed.
Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said peace discussions were expected to continue at least until next week’s planned meeting between Trump and Chinese President Xi Jinping.
“The main scenario is that oil prices will remain elevated,” Kikukawa said, pointing to continued uncertainty surrounding the region.
Iran confirmed on Wednesday that it was reviewing a US-backed proposal intended to formally end the conflict. According to sources familiar with the negotiations, the proposed framework still leaves unresolved key issues, including Washington’s demands that Iran halt its nuclear programme and reopen the Strait of Hormuz to unrestricted shipping traffic.
An Iranian foreign ministry spokesperson said Tehran would respond after reviewing the details of the proposal. Trump said he believed Iran was interested in reaching an agreement.
Sources involved in Pakistan-led mediation efforts said negotiators were close to finalising a brief memorandum that could formally bring the conflict to an end.
US media outlet Axios reported that Washington expects an Iranian response within 48 hours, describing the current discussions as the closest the two sides have come to an agreement since the war began.
Energy analysts warned that oil prices are likely to remain volatile while negotiations continue.
Priyanka Sachdeva, senior market analyst at Phillip Nova, said markets had been driven by alternating fears of supply disruption and hopes for diplomacy for more than two months.
She said a final agreement could trigger a sharp decline in oil prices as geopolitical risk premiums disappear, while any renewed attacks on energy infrastructure could rapidly send prices surging again.
Despite the possibility of a peace deal, analysts said global supplies may remain tight for weeks because shipping routes and export flows through the Gulf would take time to normalise.
Fresh data from the US Energy Information Administration showed American crude inventories fell by 2.3 million barrels last week to 457.2 million barrels, reflecting ongoing supply pressures linked to the regional crisis.
Facebook
Twitter
Instagram
LinkedIn
RSS