Oil edges higher after two-day drop on ceasefire deal - ING

Oil prices rose this morning after a two-day decline, following US President Donald Trump's statement expressing his desire to maintain the flow of oil from Iran. His comments came after he declared a ceasefire between Iran and Israel, following US airstrikes on Iran's nuclear facilities. In a Truth Social post, Trump said that China can continue to buy Iranian oil and that he hopes that the country will also be buying "plenty" from the US as well. However, a senior White House official later signalled that curbs on Iran would remain, ING's commodity experts Ewa Manthey and Warren Patterson note.

OPEC+ is due to hold a video conference on July 6

"WTI crude is above $65 a barrel, while Brent is trading near $68 this morning, after slumping 13% over the past two days. The Brent time spread has softened from a peak of $1.77 per barrel in backwardation last Thursday to approximately $1 per barrel this morning. However, this figure remains elevated compared to the first five months of the year, where it fluctuated around $0.25-0.50 per barrel."

"While concerns regarding Middle Eastern supply have diminished for now, they have not entirely disappeared, and there remains a stronger demand for immediate supply. The conflict in the Middle East hasn't had any significant impact on oil flows from the Persian Gulf so far. Meanwhile, exports from Iran have surged. OPEC+ is due to hold a video conference on 6 July to consider a further supply boost in August."

"In the United States, the American Petroleum Institute (API) reported a decrease in crude oil inventories by 4.28 million barrels over the past week, which is significantly above the anticipated decrease of around 0.6 million barrels. In terms of refined products, gasoline inventories rose by 0.8 million barrels, while distillate inventories fell by 1.03 million barrels."