Oil Prices Rise Over 2% as Middle East Uncertainty Persists
Oil prices moved higher during Asian trading on Thursday, gaining more than 2% as markets reacted to mixed signals around potential de-escalation in the Middle East and Iran’s review of a U.S. proposal to end the conflict.
Brent crude futures rose 2.3% to $104.54 per barrel, while U.S. West Texas Intermediate (WTI) crude also climbed 2.3% to $92.32 per barrel. Both benchmarks had declined by more than 2% in the previous session.
Iran Reviews US Proposal but Rules Out Direct Talks
Iran is reportedly assessing a U.S.-backed plan aimed at ending hostilities, though it has not formally accepted the proposal.
While Tehran has avoided outright rejection, it has made clear that direct negotiations with United States are not currently on the table, signaling that key disagreements remain unresolved.
This lack of clarity has kept investors cautious and contributed to ongoing market volatility.
Oil Markets Remain Highly Volatile
Crude prices have experienced sharp swings in recent weeks, as the conflict disrupted energy flows from the Gulf region—one of the most critical areas for global oil supply.
Earlier this month, Brent crude surged above $119 per barrel amid fears of supply disruptions. A major focus for markets remains the Strait of Hormuz, which handles roughly 20% of global oil shipments.
Conflicting Signals from Washington Add to Uncertainty
Oil prices briefly declined on Wednesday after reports suggested potential diplomatic progress, reducing some of the geopolitical risk premium.
However, uncertainty remains high as U.S. officials continue to warn of stronger measures if Iran fails to engage constructively in peace efforts.
US Inventory Data Signals Weak Demand
Despite the rebound in prices, bearish signals emerged from U.S. inventory data released by the Energy Information Administration.
Crude stockpiles increased by 6.93 million barrels last week, significantly exceeding expectations for a 1.3 million-barrel decline. This suggests weaker-than-expected refinery demand.
Distillate inventories also rose by 3.03 million barrels, contrary to expectations for a draw, pointing to softer demand for diesel and heating fuels.
Meanwhile, gasoline inventories fell by 2.59 million barrels, although the decline was smaller compared to the previous week.
