Oil prices inched higher on Wednesday as markets weighed the stability of a US-brokered ceasefire between Iran and Israel, while industry data indicating strong fuel demand in the United States added further support.
Brent crude futures rose 48 cents, or 0.7%, to $67.62 per barrel by 10:30 GMT. US West Texas Intermediate (WTI) crude climbed 44 cents, or 0.7%, to $64.81. The gains follow a sharp drop earlier in the week, with Brent settling on Tuesday at its lowest since June 10 and WTI at its lowest since June 5 — both prior to Israel’s surprise airstrikes on key Iranian military and nuclear sites on June 13.
Prices had surged to five-month highs following the US strike on Iran’s uranium-enrichment facilities over the weekend, before easing as geopolitical tensions began to cool.
“Concerns about oil supply disruptions have declined,” said Giovanni Staunovo, commodity analyst at UBS. “But the drawdown in US inventories shows that demand is still holding up.”
According to figures from the American Petroleum Institute, US crude stockpiles fell by 4.23 million barrels in the week ending June 20, suggesting robust domestic consumption. Official government data is due later on Wednesday.
Further optimism came from signals that the US Federal Reserve may accelerate plans to cut interest rates. In testimony before Congress, Fed Chair Jerome Powell hinted that a rate cut could come as early as July — earlier than many had anticipated. Lower interest rates typically boost economic activity, driving up energy demand.
“The market is increasingly pricing in a more accommodative Fed,” said Kelvin Wong, senior market analyst at OANDA. “That’s offering a floor for oil prices.”
On the geopolitical front, both Iran and Israel signalled an end to hostilities after a 12-day air war, with US President Donald Trump pressuring both nations to honour a ceasefire. While tensions remain, early assessments suggest the US airstrikes only temporarily hindered Iran’s nuclear program.
“While concerns regarding Middle Eastern supply have diminished for now, they have not entirely disappeared,” analysts at ING wrote in a note. “There remains a stronger demand for immediate supply.”
Independent analyst Tina Teng said prices are likely to consolidate within the $65–$70 range in the near term as traders await further US economic data and the Fed’s upcoming policy decisions.
With volatility in global oil markets still elevated, attention now turns to official US inventory figures and any new signals from central banks on the direction of monetary policy.
