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Oil prices saw a modest rebound on Wednesday, following sharp declines in the previous two sessions, as traders evaluated the U.S.-brokered ceasefire between Israel and Iran.
As of 06:00 ET (10:00 GMT), Brent oil futures for August rose 0.9%, reaching $66.74 per barrel, while West Texas Intermediate (WTI) crude futures advanced 1% to $65.02 per barrel.
Israel-Iran Ceasefire Holds for Now
Prices had plunged to near three-week lows on Tuesday after U.S. President Donald Trump announced a ceasefire between Israel and Iran, easing concerns over potential supply disruptions from the ongoing Middle Eastern conflict.
While the truce has been fragile, with both countries being criticized by Trump for violating the ceasefire shortly after it was declared, by Wednesday, Israel and Iran appeared to have at least halted their aerial strikes.
Despite the ongoing tensions, the conflict has not caused significant disruption to oil flows from the Persian Gulf, and Iran’s oil exports have continued to surge.
The U.S. launched attacks over the weekend on three key Iranian nuclear sites using high-yield bunker busters, causing significant damage, especially to underground facilities. Initial reports indicated that while the strikes delayed Iran’s nuclear ambitions by months, they did not entirely destroy the country’s nuclear program.
However, U.S. officials have rejected these reports, insisting that the strikes successfully “obliterated” Iran’s nuclear facilities.
OPEC+ and Inventory Data Offer Support
Meanwhile, the Organization of Petroleum Exporting Countries and its allies (OPEC+) are scheduled to hold a video conference on July 6 to discuss a possible supply boost in August. The meeting is expected to weigh potential increases in production to meet rising global demand.
Further support for crude prices came from industry data showing a significant draw in U.S. inventories. According to the American Petroleum Institute (API), U.S. oil stockpiles decreased by nearly 4.3 million barrels last week, well above expectations for a 600,000-barrel draw. This follows the previous week’s draw of 10.1 million barrels, indicating tightening U.S. oil stockpiles.
The API data typically serves as a precursor to official inventory figures, due later on Wednesday, and has helped fuel optimism about rising fuel demand, especially with the summer driving season in full swing.
