Oil Rises for Third Day as Middle East Tensions Escalate; WTI Tops $96
Summary
- Renewed military clashes between the US and Iran lifted international oil prices for a third straight trading day, with WTI rising above $96 a barrel.
- US commercial crude inventories fell by 8 million barrels from a week earlier, twice the analyst forecast, adding upward pressure on oil prices.
- Bob Yawger said the chances of a ceasefire agreement are shrinking and that worsening tensions in the Middle East are heightening supply concerns.
Forecast Trend Report by Period
Oil Market Anxiety Deepens as US-Iran Clashes Resume
Oil prices rose for a third straight session as ceasefire talks between the US and Iran failed to make progress and military clashes resumed. A drop in US crude inventories added to the rally, lifting West Texas Intermediate above $96 a barrel.
On June 3, August Brent crude futures settled up 1.9% at $97.81 a barrel on ICE Futures Europe. July WTI futures closed 2.4% higher at $96.02 a barrel on the New York Mercantile Exchange.
Early that day, Iran's Islamic Revolutionary Guard Corps said it had attacked a US Air Force base in Kuwait and the base of the US Navy's Fifth Fleet in Bahrain in response to strikes on an Iranian tanker and a communications tower on Qeshm Island. US Central Command pushed back, saying the Iranian attack had failed.
Kuwait's Defense Ministry said it shot down 13 ballistic missiles and 17 drones launched by Iran early the same day. It added that civilian infrastructure, including Kuwait International Airport, suffered significant property damage, and that one Indian resident was killed and several others were injured. Bahrain's military also said it intercepted three missiles and several drones launched from Iran and condemned Tehran.
The US military had earlier struck radar and related facilities on Qeshm Island on June 1 and disabled an Iranian tanker with a missile on June 2. Iran indicated that its airstrikes on Kuwait and Bahrain were retaliation for the recent US attacks. Bob Yawger, an analyst at Mizuho Securities, said the odds of reaching a ceasefire agreement seemed to be shrinking, underscoring a worsening situation.
A bigger-than-expected draw in US crude inventories also supported prices. The Energy Information Administration said US commercial crude stockpiles fell by 8 million barrels from a week earlier to 433.7 million barrels in the week ended May 29. That was twice the 4 million-barrel decline forecast by analysts surveyed by Reuters, heightening supply concerns ahead of the summer peak-demand season.
Oh Se-seong, Hankyung.com reporter sesung@hankyung.com
Korea Economic Daily
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