Commodities
Trump's Iran Deal Sparks Oil Price Plunge Amid Tightening Supply
Oil prices plummeted nearly 6% to $79.57 per barrel after US President Trump called off a planned strike on Iran in response to Tehran's request for more time to finalize a deal.
The removal of the geopolitical risk premium had supported oil prices since the conflict began, but with the situation now de-escalating, markets are pricing in lower expectations.
US commercial crude stocks fell 7.2 million barrels to 404.5 million, about 6% below the five-year average, indicating tighter physical supply than current oil prices imply.
The tight supply is also reflected in US refineries operating at 97.2% of capacity and crude inputs rising by 271,000 barrels per day to 17.3 million barrels per day, supporting strong crude demand.