On Tuesday, oil prices fell after a significant rise the previous day, reflecting ongoing market caution regarding U.S.-Iran negotiations. Brent crude futures decreased by 53 cents to $94.45 a barrel, while U.S. West Texas Intermediate dropped 56 cents to $91.60 a barrel.
The decline comes after both benchmarks had gained over 5% in the prior session, following a month where they lost more than 16% due to hopes of a peace deal. U.S. President Donald Trump indicated that talks with Iran were still in progress, although conflicting reports from Iranian sources suggested a halt in indirect negotiations.
Analysts like Priyanka Sachdeva from Phillip Nova noted that the market's optimism has not translated into tangible changes, as uncertainty persists. Tim Waterer from KCM Trade emphasized that the negotiations' status will significantly influence the risk premium in oil prices.
Additionally, the geopolitical landscape is complicated by a partial ceasefire announcement between Hezbollah and Israel, which could impact the broader conflict involving Iran. The ongoing tensions have severely restricted shipping in the Gulf, affecting global oil and LNG flows and contributing to a 50% price increase.
Meanwhile, U.S. crude exports reached a record 5.6 million barrels per day in May, driven by heightened demand from Asian and European markets amid the crisis. A preliminary Reuters poll indicated a projected decline in U.S. crude stockpiles by about 3.6 million barrels for the week ending May 29, suggesting tightening supply conditions