Oil Prices Climb as Supply Tightens, Dollar Weakens Amid Mideast Caution
Global oil markets gained momentum on Thursday as investors focused on supply-demand dynamics following a decline in U.S. crude and fuel inventories, coupled with the dollar’s multi-year weakness. However, developments surrounding the Iran-Israel ceasefire continued to temper market enthusiasm.
Brent crude futures rose by $1.15 (1.7%) to $68.83 per barrel by 11:37 a.m. EDT (1637 GMT), while U.S. West Texas Intermediate (WTI) crude climbed $1.32 (2.03%) to $66.24 per barrel.
Both benchmarks had already posted nearly 1% gains on Wednesday, rebounding from earlier weekly losses after data highlighted strong U.S. consumption patterns. Current Brent futures remain below their June 12 close of $69.36, recorded before Israel launched airstrikes on Iran.
Phil Flynn of Price Futures Group noted that the market was beginning to acknowledge the sudden tightening of crude inventories. “The market is starting to digest the fact that crude oil inventories are very tight all of a sudden,” Flynn said. “From a seasonal viewpoint, we are at a decade low for this time of year,” he added.
UBS analyst Giovanni Staunovo observed that oil prices were tracking equity market movements on Thursday, while ANZ analysts reported that U.S. driving season demand—despite a slow start—was now gaining traction.
Data released Wednesday by the Energy Information Administration (EIA) showed a decline in U.S. crude oil and fuel stocks for the week ending June 20, coinciding with increased refining activity and stronger consumption.
The EIA reported a crude inventory draw of 5.8 million barrels, far exceeding the 797,000-barrel reduction expected by a Reuters poll.
Additional support for oil prices came from the dollar index, which fell to a three-year low against major currencies. This weakness followed reports that President Trump was moving forward with selecting new Federal Reserve leadership, sparking renewed speculation about potential U.S. interest rate cuts.
A weaker dollar makes oil cheaper for holders of other currencies, effectively boosting global demand.
President Trump welcomed the swift resolution of the Iran-Israel conflict and signaled Washington’s intention to secure Tehran’s commitment to abandon its nuclear program during upcoming negotiations.
On Wednesday, Trump reaffirmed continued “maximum pressure” on Iran, including restrictions on Iranian oil exports, though he hinted at potential enforcement flexibility to support regional reconstruction efforts.
Citi analysts commented Thursday: “The rapid push for a ceasefire suggests that President Trump remains sensitive to high oil prices, in our view, potentially capping the geopolitical risk premium even as the conflict may linger.”
