Brent prices little changed

Brent crude futures trimmed earlier gains on Thursday, trading largely flat around $68 per barrel, holding below the highs seen on June 12th when tensions flared following Israel’s attack on Iran.

The market is seeking stability, with the ceasefire between Israel and Iran continuing to hold, reducing fears of a major escalation. Initial concerns about the potential closure of the strategically important Strait of Hormuz or significant damage to regional oil infrastructure have eased, calming some of the more immediate supply fears.

However, geopolitical uncertainties persist, as US President Trump reiterated that pressure on Iranian oil exports will remain in place, further complicating the outlook. Trump also confirmed that the US will engage in talks with Iran next week, which could add another layer of unpredictability to the situation.

Meanwhile, the global oil market continues to be well-supplied, with OPEC having significantly ramped up production in recent months to meet demand. US shale producers are also maintaining production at record highs, showing resilience despite fluctuations in global prices.

The latest data from the US Energy Information Administration (EIA) revealed a significant drawdown in US crude inventories, with a decline of 5.8 million barrels last week. Additionally, stockpiles at Cushing, Oklahoma—an important delivery hub for US crude—dropped to their lowest levels since February, signaling tightening supply conditions.

Despite these drawdowns, the market remains cautiously balanced as investors eye the upcoming OPEC+ meeting on July 6, where key decisions on production policy for August will be made. This meeting could provide crucial signals on the cartel's approach to managing output levels amid ongoing global economic uncertainties and fluctuating demand.

The market's focus is now squarely on the potential outcomes of this meeting, as OPEC+ grapples with how to stabilize prices while navigating geopolitical and supply-demand dynamics.