Oil prices inched higher during Asian trading on Thursday, supported by a substantial drop in U.S. crude inventories, which boosted optimism about robust demand. However, gains were capped by signs that the ceasefire between Israel and Iran remained intact, reducing geopolitical risk.
Prices were also buoyed by a weakening U.S. dollar. The greenback extended its losses following reports that President Donald Trump might announce a successor to Federal Reserve Chair Jerome Powell sooner than anticipated—likely an attempt to undercut Powell and stoke expectations of interest rate cuts.
Despite Thursday’s modest rebound, oil remained under pressure after Trump’s announcement of the Israel-Iran truce earlier in the week. The ceasefire, which took effect early Tuesday, appeared to be holding, easing fears of supply disruptions from the Middle East.
By 21:17 ET (01:17 GMT), Brent crude futures were up 0.4% to $67.93 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 0.5% to $63.76 per barrel.
U.S. Crude Stockpiles Fall More Than Expected
The Energy Information Administration reported on Wednesday that U.S. crude inventories fell by 5.8 million barrels for the week ending June 20 — well above forecasts for a 1.2 million barrel draw.
This marked the second consecutive week of significant inventory declines, following an 11.5 million barrel drop the previous week. Distillate and gasoline stockpiles also posted steep reductions.
The data pointed to sustained demand in the world’s largest oil consumer, likely boosted by the onset of the summer travel season. It helped ease some market concerns that weaker consumer spending and uncertainty around Trump’s trade tariffs could weigh on fuel consumption — though those risks remain in the outlook.
Oil Still Under Pressure from Easing Geopolitical Tensions
Despite Thursday’s uptick, oil prices were still down for the week. The Israel-Iran ceasefire has reduced the likelihood of immediate supply shocks from the region.
Trump refrained from introducing new sanctions on Iran’s oil sector in response to the recent conflict and even hinted that some sanctions could be eased to support Iran’s post-conflict recovery. Nuclear negotiations between the U.S. and Iran are scheduled for next week.
Additionally, Iran did not disrupt traffic through the Strait of Hormuz — a key global oil transit route — calming fears of interruptions in oil shipments to Europe and Asia.
