Israel-Lebanon Ceasefire: Oil Prices Fall to $96.63
Israel-Lebanon Ceasefire: Oil Prices Fall to $96.63
Jakarta, CNBC Indonesia - Global oil prices weakened in trading on Thursday morning (4 June 2026) after a sharp rally in recent days.
Market participants began to reduce geopolitical risk premiums following a ceasefire agreement between Lebanon and Israel, raising hopes for a broader agreement to end the conflict between the United States, Israel, and Iran.
According to Refinitiv data at 09.15 WIB, Brent contracts were at $96.63 per barrel, down 1.21% from the previous close of $97.81 per barrel. Meanwhile, West Texas Intermediate (WTI) was recorded at $94.96 per barrel, or a correction of 1.10% from Wednesday’s closing position of $96.02 per barrel. This decline occurred one day after both benchmarks jumped about 2% and extended gains that had been ongoing since the beginning of the week.
Although down this morning, oil prices are still well above the end-May level. Brent has strengthened by about 5% compared to the position on May 29 at $92.05 per barrel. WTI even jumped more than 8% from $87.36 per barrel in the same period. The increase was triggered by rising tensions in the Middle East, including Iran’s attacks on Kuwait and US military operations around the Strait of Hormuz, the world’s most strategic energy shipping route that carries almost a fifth of global oil trade.
However, market sentiment is starting to shift. The Lebanon-Israel ceasefire agreement provides room for diplomatic optimism. US President Donald Trump said progress in negotiations with Iran could be achieved this weekend. From the Iranian side, Foreign Minister Abbas Araqchi said communication with Washington is still ongoing, although it has not yet produced a breakthrough. The market is reading these developments as an opportunity to reduce the risk of supply disruptions from the Middle East.
On the other hand, the fundamentals of the oil market are still relatively tight. Data from the Energy Information Administration (EIA) showed that US crude oil inventories fell by 8 million barrels in the week ending May 29 to 433.7 million barrels. This figure is twice as large as analysts’ expectations, which had predicted a decline of about 4 million barrels. The larger-than-expected decline in stocks indicates that global supply is not yet fully able to meet consumption needs.
These conditions mean that the room for oil price declines is still limited, even if geopolitical tensions ease. Haitong Futures noted in its report that oil prices are likely to remain in the upper range of their trading range due to ongoing imbalances in supply and demand. The continued decline in global oil inventories is a factor that keeps the market sensitive to any geopolitical developments or new supply disruptions.
CNBC Indonesia
(emb/emb)