Oil prices rose in Asian trade on Wednesday, seeing some gains after falling sharply in the last two sessions with focus squarely on whether a U.S.-brokered ceasefire between Israel and Iran will hold.
Industry data signaling another week of bumper U.S. inventory draws also helped boost crude prices, as demand in the world’s biggest fuel consumer appeared to be picking up.
Brent oil futures for August jumped 1.2% to $67.93 a barrel, while West Texas Intermediate crude futures rose 1.2% to $63.94 a barrel by 20:54 ET (00:54 GMT).
Prices had plummeted to a near three-week low on Tuesday after U.S. President Donald Trump announced a ceasefire between Israel and Iran, helping quell some concerns over supply disruptions stemming from their conflict.
Israel-Iran ceasefire in focus, reports question destruction of Iran nuclear sites
Oil markets were now watching for whether the ceasefire will hold, especially after Trump chided both countries for violating the truce shortly after it took effect on Tuesday.
But Israel and Iran appeared to have at least ceased their aerial strikes against each other by Wednesday morning. Trump said the ceasefire will become permanent after 24 hours of staying in effect.
Markets were now on edge over any potential resumption in hostilities between the Middle Eastern powers.
A slew of reports, citing preliminary intel, said that U.S. strikes against Iran had not completely wiped out the country’s nuclear facilities, and had only set back the country’s nuclear aspirations by months.
But U.S. officials rejected these reports, maintaining their claims that the weekend strikes had “obliterated” Iran’s nuclear facilities.
The U.S. had attacked three nuclear sites in Iran with high-yield bunker busters, with a bulk of the damage reportedly done underground.
US inventories see another week of outsized draws- API
Data from the American Petroleum Institute showed on Tuesday that U.S. inventories shrank nearly 4.3 million barrels in the past week, much more than expectations for a draw of 0.6 mb.
This follows a bumper 10.1 mb draw from the week before, pointing to rapidly tightening U.S. oil stockpiles.
The API data usually heralds a similar trend from official inventory data, which is due later on Wednesday.
Outsized draws in U.S. inventories helped spur some confidence in fuel demand, which was seen picking up sharply with the summer season.
Source: Investing