Oil prices rebound from a 5% drop as traders buy the dip, but diplomatic progress between the US and Iran limits upside.
West Texas Intermediate crude climbed 1.56% to $75.50 on Wednesday, recovering from a more than 5% decline in the prior session. The move reflects a technical rebound as investors buy into oversold conditions, though gains remain constrained by optimism over US-Iran negotiations.
Diplomatic efforts to reopen the Strait of Hormuz have eased supply disruption fears. Qatar-mediated talks produced an interim agreement, while President Trump paused military strikes to allow negotiations. Iran is also reviewing proposals for European mine-clearing operations in the strait.
Market fundamentals add pressure, with API data showing an unexpected rise in US crude inventories. Traders await the EIA’s official report later in the day for further direction.