WTI holds near $86.50 on US-Iran ceasefire extension

The benchmark West Texas Intermediate crude oil lost ground for the third successive day, trading around $86.60 per barrel early Friday on easing supply concerns following reports of a tentative 60-day ceasefire extension between the US and Iran. This potential geopolitical breakthrough significantly raised prospects for unrestricted shipping through the critical Strait of Hormuz. According to reports, the agreement would require Iran to clear all maritime mines from the strategic waterway within 30 days. However, traders maintained a degree of caution following a CNN report indicating that US President Donald Trump has yet to officially approve the terms. This hesitation was echoed by Vice President JD Vance, who noted that while the parties are close to a deal, Washington is “not there yet,” while concurrently reminding markets that the US remains positioned to substantially set back Tehran’s nuclear programme if necessary. According to ING analysts cited by Reuters, while reopening the strait would offer some immediate relief to the oil market, a full recovery remains highly uncertain. The bank noted that upstream oil production has dropped significantly since the outbreak of the war, primarily because producers were forced to shut in output to manage severe storage constraints. Because of these structural disruptions, ING expects the eventual recovery in upstream production to be a gradual process rather than an immediate bounce-back. The latest EIA Crude Oil Stocks Change report indicated that US crude inventories fell by 3.3 mln barrels last week. Although this marks the sixth consecutive week of inventory declines, the draw was notably smaller than the 4.1-mln-barrel reduction that analysts polled by Reuters had anticipated. This weaker-than-expected inventory decline ultimately served to further dampen bullish sentiment across the oil sector. (Source: OANDA) The post WTI holds near $86.50 on US-Iran ceasefire extension appeared first on Financial Mirror.