Oil Prices Pull Back After Hitting Session Highs
Oil prices retreated from earlier session highs on Thursday after WTI crude briefly surged above the $100 per barrel mark. The pullback followed signs of easing geopolitical tensions, as Israel signaled its willingness to enter negotiations with Lebanon.
Despite the decline from peak levels, ongoing disruptions in the Strait of Hormuz continued to keep investors concerned about global oil supply.
Brent crude rose 0.2% to $94.92 per barrel after earlier reaching $99.50, while U.S. WTI crude gained 2.2% to $96.51, after peaking at $102.64 during the session.
Ceasefire Developments Shift Market Sentiment
Oil markets had experienced sharp volatility, with both benchmarks dropping more than 13% on Wednesday following President Donald Trump’s announcement of a temporary ceasefire with Iran.
However, tensions remained elevated as Israeli military operations in Lebanon continued, raising doubts about the scope and enforcement of the ceasefire agreement.
Iran responded by hardening its stance, warning that negotiations with the U.S. would be “unreasonable” under current conditions and accusing Israel of violating the truce.
Israel-Lebanon Talks Ease Immediate Concerns
A key turning point came after Israeli Prime Minister Benjamin Netanyahu confirmed that Israel would move forward with direct negotiations with Lebanon.
The talks are expected to focus on disarming Hezbollah and establishing more stable relations between the two nations. This development helped ease some geopolitical concerns, contributing to the pullback in oil prices.
Strait of Hormuz Disruptions Keep Supply Risks High
Despite progress toward negotiations, Iran has continued to halt oil tanker traffic through the Strait of Hormuz, delaying any meaningful recovery in global oil supply flows.
This ongoing disruption remains a major risk factor for energy markets, as the strait is a critical route for global oil transportation.
JPMorgan Sees Moderate Oil Price Shock
JPMorgan analysts described the current rise in oil prices as a “moderate shock,” noting that price increases have been relatively contained despite significant supply disruptions.
The bank forecasts Brent crude to average around $100 per barrel in the near term before easing. Analysts highlighted that existing supply buffers and expectations of a temporary disruption have helped limit extreme price spikes.
However, they warned that prolonged disruptions in the Strait of Hormuz could lead to tighter supply conditions, reduced industrial activity, and heightened risks for global economies, particularly in Asia.
U.S. Crude Inventories Rise Unexpectedly
Data from the U.S. Energy Information Administration showed that crude oil inventories increased by 3.1 million barrels to 464.7 million barrels for the week ending April 3 — the highest level in nearly three years. This came as a surprise, as markets had expected a decline.
Meanwhile, fuel inventories moved in the opposite direction. Distillate stocks, including diesel and heating oil, fell by 3.1 million barrels due to strong export demand, while gasoline inventories declined by 1.6 million barrels.
