On Thursday, oil prices rose over 2% as geopolitical tensions in West Asia increased following fresh US strikes on an Iranian military facility. The rise came despite continued negotiation talks between Washington and Tehran to resolve the conflict that has been going on for three months.
The Brent crude futures rose 2.76% to $96.88 a barrel. US West Texas Intermediate (WTI) advanced 2.03% to $91.37 a barrel. The more actively traded August contract for Brent crude futures jumped $1.64, or 1.78%, to $93.89 per barrel, while the futures contract for November delivery of West Texas Intermediate rose $1.90, or 2.02%, to $96.19 per barrel.
The rebound came after a steep drop in the previous session, as both the crude benchmarks sold off by more than 5% and hit a one-month low. The price had fallen earlier on optimism of a potential deal between the US and Iran to end the conflict and open the Strait of Hormuz.
Crude prices rose following reports of fresh overnight strikes on the Iranian military facility by the US. The strike hit a site that was seen as a potential threat to the American forces and commercial shipping in the Strait of Hormuz, according to a Reuters reporter on X, quoting a US official.
The Strait of Hormuz, the world's largest oil transit route, is a concern for energy markets. Any disruptions in the area can lead to potential shortages and increased shipping risks.
US President Donald Trump said he is “not satisfied” with the ongoing negotiations. The White House also refused to credit an Iranian report that Tehran and Oman would jointly manage the Strait of Hormuz under a proposed draft agreement.
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Crude is headed for a second weekly loss, even as prices climbed, as traders await an interim deal between the US and Iran. However, major issues remain unresolved, such as Iran's nuclear program and control of the Strait of Hormuz.
"Oil supply remains constrained, and key sticking points have yet to be resolved," ANZ commodity strategist Daniel Hynes said in a note.
In the US, crude oil stockpiles fell by 2.8 million barrels last week, the sixth straight week of declines, according to American Petroleum Institute data.
The US Energy Information Administration will release official inventory data on Thursday, which is a day late thanks to Memorial Day.