On Tuesday, oil prices rose, but the increase was limited as traders sought to factor in not only the easing of tensions in the region but also rising supply and demand outlooks.
According to Reuters, Brent crude futures rose 38 cents (0.5%) to $72.37 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures rose 30 cents (0.4%) to $68.85 per barrel, after stabilizing at a level close to pre-war levels in Iran.
“Attempts to resume supplies have eased the risk premium, but the market remains cautious about the stability of the current ceasefire due to the volatile relationship between the U.S. and Iran,” notes Tim Waterer, chief analyst at KCM Trade. He added that analysts will be closely monitoring the response from the demand side, particularly from China.
Waterer also noted that the market has already priced in most of the positive supply-side news, and further fluctuations in oil prices will depend on whether the actual situation matches the optimistic headlines.
U.S. President Donald Trump announced on Monday that the country would either reach an agreement with Iran or “see it through to the end,” threatening military action amid tensions that arose following the funeral of former leader Ayatollah Ali Khamenei.
