Oil prices edge up as US crude stockpiles drop more than expected 

SINGAPORE: Oil prices ticked up in early Thursday trading, supported by a sharper-than-expected drop in US crude inventories, which pointed to strong demand. However, concerns lingered among investors over the fragile ceasefire between Iran and Israel and its potential impact on supply risks in the Middle East. 

By 0330 GMT, Brent crude futures rose 15 cents to $67.83 a barrel, while US West Texas Intermediate (WTI) crude climbed 20 cents to $65.12 a barrel. Both benchmarks had gained nearly 1 per cent the previous day, rebounding from early-week losses after data showed a resilient US fuel demand. 

“Falling inventories suggest healthy US consumption,” said Yuki Takashima, economist at Nomura Securities. “But uncertainty around the Iran-Israel ceasefire is keeping investors on edge, with attention now turning to future OPEC+ production moves.” 

Takashima said WTI prices may retreat to the $60–$65 range, reflecting levels seen before the recent regional conflict. 

Analysts at ANZ said market focus had shifted back to fundamentals following the de-escalation of tensions in the Middle East. US government data showed crude stockpiles dropped for a fifth consecutive week, while fuel demand surged as the summer driving season got underway. 

According to the Energy Information Administration (EIA), US crude inventories declined by 5.8 million barrels in the week to June 20, far exceeding expectations for a 797,000-barrel draw. Gasoline stocks also fell unexpectedly by 2.1 million barrels, with demand reaching its highest level since December 2021. 

In a related development, Rosneft CEO Igor Sechin said on Saturday that OPEC+ may bring forward planned output increases by about a year, depending on market conditions. 

Meanwhile, US President Donald Trump praised the swift resolution of the Iran-Israel conflict and indicated that talks with Iranian officials next week could seek commitments on curbing Tehran’s nuclear programme. He noted that while sanctions on Iranian oil remain in place, the US may ease enforcement to support the country’s post-war recovery. 

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