Global oil prices continued to weaken during Thursday\u2019s trading.\nBased on Refinitiv data as of 09:40 Western Indonesia Time, Brent crude\nwas priced at US$78.28 per barrel, a decline of 1.6% from the previous\nclose of US$79.55 per barrel. West Texas Intermediate (WTI) crude was\nrecorded at US$75.42 per barrel, down 1.8% from the prior day\u2019s US$76.79\nper barrel.<\/p>\n
Persistent selling pressure in recent days has led to a significant\ncorrection. Since 12 June, Brent has fallen more than 10%, while WTI has\nslumped around 11%. At the start of June, Brent had touched US$97.81 per\nbarrel and WTI reached US$96.02 per barrel. In roughly two weeks, Brent\nhas shed nearly US$20 per barrel, with WTI losing more than US$20.<\/p>\n
The decline was triggered by a provisional agreement between the\nUnited States and Iran that paves the way for an end to the Iran\nconflict and the restoration of shipping activity in the Strait of\nHormuz. This route is one of the world\u2019s most vital energy corridors,\nserving as the main conduit for oil and gas exports from the Middle East\nto global markets. Under the memorandum of understanding agreed by both\nnations, Iran will permit unimpeded vessel traffic through the Strait of\nHormuz during a 60-day negotiation period. The deal also opens the\npossibility of lifting oil sanctions on Iran, potentially allowing the\ncountry\u2019s crude exports to re-enter the international market sooner than\npreviously anticipated.<\/p>\n
The market views the resumption of Iranian exports and the\nnormalisation of shipping through the Strait of Hormuz as reducing the\nrisk of global supply disruptions, which had been a key factor driving\nup prices in recent months. IG analyst Tony Sycamore noted that market\nparticipants are now aggressively pricing in the potential return of\nIranian barrels to the global market in the near term. The prospect of\nincreased supply is further reinforced by projections from the\nInternational Energy Agency (IEA). In its latest monthly report, the IEA\nwarned that the current supply crisis could transform into a substantial\nsurplus by 2027 if Middle Eastern production recovers. The agency\nestimates that global oil supply could exceed demand by as much as 5.05\nmillion barrels per day next year.<\/p>\n
Nevertheless, the market remains cautious about the implementation of\nthe agreement. A day earlier, oil prices had attempted to recover as\ninvestors assessed lingering uncertainties regarding the durability of\nthe peace deal and the process of reopening the Strait of Hormuz. Israel\nhas also not fully endorsed the latest agreement between Washington and\nTehran, meaning geopolitical risk has not entirely dissipated from the\nenergy market. On the fundamental side, industry data showed that US\ncrude oil inventories fell by 8.3 million barrels in the week ending 12\nJune, far exceeding expectations of a 4.6 million barrel draw. However,\nthis sentiment failed to lift prices as market attention remained fixed\non the potential surge in Middle Eastern supply.<\/p>\n
Global oil demand is also facing new headwinds. Recent data indicates\nthat China\u2019s crude processing activity in May fell 9.1% compared to the\nsame period last year, hitting its lowest level in nearly four years.\nMeanwhile, the US central bank is beginning to consider the possibility\nof raising interest rates again this year to curb inflation. If monetary\npolicy tightens further, economic activity risks slowing, which could in\nturn dampen energy consumption.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/oil-prices-continue-to-slide-1781754712", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }