Key facts
- Oil prices declined, reversing a three-day gain.
- Israel and Lebanon agreed to a conditional ceasefire.
- The ceasefire is contingent on Hezbollah ceasing hostilities.
- U.S. crude stockpiles fell by 8 million barrels in the week ended May 29.
- Brent futures fell 0.89% to $96.92 a barrel.
- WTI crude declined 0.81% to $95.24 a barrel.
Oil prices eased on Thursday, reversing a three-day gain, as Israel and Lebanon agreed to a conditional ceasefire. The agreement, contingent on Hezbollah ceasing hostilities, boosted hopes for a broader deal to end U.S.-Iran tensions. Brent futures fell 0.89% to $96.92 a barrel, and U.S. West Texas Intermediate (WTI) crude declined 0.81% to $95.24. Both benchmarks had risen about 2% on Wednesday following renewed Middle East hostilities. U.S. crude stockpiles fell by 8 million barrels to 433.7 million barrels in the week ended May 29, exceeding analysts' expectations for a 4-million-barrel draw. The International Energy Agency warned that global oil inventories could hit critical levels ahead of peak summer demand if stock draws continue at their current pace. ING noted that inventories are likely to continue tightening into the third quarter, leaving upside risk to prices. The commander of Iran's Revolutionary Guards' Quds Force, Esmail Qaani, stated that Iran's minimum demand is for Israel to withdraw to positions held before the war began. Iran has signaled that there has been “no tangible progress” in the talks with the U.S. on a potential deal while the Israel-Lebanon ceasefire announced by the United States overnight appears shaky. Iran's Foreign Minister Abbas Araghchi was quoted as saying by the semi-official Iranian news agency Tasnim that “no tangible progress has been achieved in the negotiation process.” The U.S. and Iran have been exchanging messages on a framework proposal for a potential agreement for weeks. The deal is contingent on Hezbollah halting attacks on Israeli forces and withdrawing fighters from southern Lebanon, the U.S. State Department said.