West Texas Intermediate (WTI) futures on NYMEX rose by 2% to near $76.00 during the European trading session on Thursday, but struggled to maintain levels above the $76.00 mark. This movement was primarily influenced by hopes of de-escalation in Middle East conflicts, particularly between the United States, Israel, and Iran, following a report from SkyNewsArabia indicating that Iran may be willing to abandon its nuclear ambitions if the US offers a rewarding alternative. Khatibzadeh was quoted as saying, 'Iran is ready to abandon its nuclear program on the condition that the US presents a rewarding alternative offer,' according to Sky News Arabia [1].
The oil price had previously rallied due to heightened military activities near the Strait of Hormuz, which disrupted supply mechanisms amid the ongoing war. The initial market reaction to the news of potential de-escalation was negative, but WTI subsequently recovered those losses and held onto intraday gains [1].
Rising energy prices, driven by oil supply disruptions, have prompted fears of high inflation globally. This scenario is expected to discourage central banks from easing monetary policy conditions, which is theoretically unfavorable for oil prices in the longer term [1].
CONCLUSION
WTI futures experienced volatility, initially dropping on news of possible de-escalation in Middle East tensions but recovering to post intraday gains. The market remains sensitive to geopolitical developments and supply disruptions, with inflation concerns likely to influence central bank policy and oil price dynamics.