Diplomatic progress in the Middle East eases supply disruption fears, pressuring oil prices despite steep US inventory declines.
West Texas Intermediate crude fell to around $93.10 in early European trading Thursday after Israel and Lebanon agreed to renew a ceasefire. The deal, brokered through US-led talks, includes pilot security zones to be controlled by Lebanese armed forces, reducing immediate conflict risks.
US crude inventories plunged by 7.974 million barrels last week, far exceeding the 4.0 million barrel consensus forecast. The drawdown follows a 3.327 million barrel decline the prior week, signaling strong demand but failing to offset geopolitical relief.
Despite the ceasefire, tensions persist, with Iran’s foreign minister reporting no tangible progress in broader Middle East negotiations. Markets remain sensitive to escalation risks, which could reverse the price decline.