Oil Prices Mixed as US-Iran De-Escalation Hopes Offset Surprise Crude Build
Oil prices remained mixed on Wednesday as investors weighed revived hopes for a de-escalation between the United States and Iran, which could reopen shipping through the Strait of Hormuz and restore oil flows across the Middle East.
The US-Iran conflict has been a major concern for oil markets since it began at the end of February, with roughly a fifth of the world's oil and liquefied natural gas moving through the waterway.
Hopes for a de-escalation were boosted by reports that Iran and Oman have reached an understanding on managing the strait, with a joint announcement said to be in its final stages. However, analysts remained cautious on how durable any arrangement might prove, noting that similar agreements in the past have not held for long.
On the supply side, US crude inventories rose by around 2.5 million barrels last week, confounding expectations for a draw of roughly 1.5 million barrels. This increase put pressure on the US contract, with West Texas Intermediate futures falling to around $75 per barrel.