Declining inventories and strategic reserve drawdowns may sustain oil prices despite easing Middle East tensions, analysts say.
Oil prices remain supported by a sustained drawdown in US crude inventories and Strategic Petroleum Reserves, even as geopolitical risks ease. Analysts warn that persistent inventory declines could drive prices higher if market participants reassess supply tightness post-US-Iran deal talks.
Recent optimism over a potential US-Iran agreement pushed oil prices and Treasury yields lower, but the physical crude premium peaked in late March. Analysts note that inventory rebuilds, if energy flows resume, may keep prices elevated in the near term.
The drawdown in stocks has raised concerns about inflationary pressures, particularly if supply constraints persist despite reduced Middle East disruptions.