In early Asian trading on Thursday, US crude oil fluctuated narrowly and currently trades around $78.32 per barrel. Oil prices rose and fell on Wednesday, as tensions in the Middle East continued to provide support. Earlier in the day, oil prices rose nearly 2% to a two-week high, but closed down most of their gains as the Federal Reserve statement following its two-day meeting suggested that interest rate cuts may not begin until December.
Brent crude futures closed up $0.68, or 0.83%, at a settlement price of $82.60 per barrel, with a closing price of $82.52 per barrel, up approximately 0.35%; US crude oil futures closed at $78.32 per barrel, up approximately 0.18%.
Oil prices fell more than 2% last week as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, said they would gradually withdraw production cuts starting in October. However, oil prices reversed their downward trend after OPEC+ said it might reverse its production policies, with oil prices rebounding more than 5% in the past five trading days. Geopolitical concerns have also helped support oil prices.
US Secretary of State Blinken said on Wednesday that Hamas had offered many revisions to the US-supported ceasefire proposal with Israel in Gaza, some of which were not feasible. He added that the mediators were determined to bridge these differences.
Hamas senior official Osama Hamdan denied that Hamas had proposed new ideas for a ceasefire proposal. In an interview with the pan-Arab Al-Araby television station, he reiterated Hamas's position, which was that Israel rejected the proposal and accused the US government of avoiding "any commitment" to a permanent ceasefire blueprint in Gaza, along with Israel.
White House National Security Advisor Sullivan said on Wednesday that some of the revisions proposed by Hamas were insignificant and "not unexpected," while other changes differed significantly from the contents outlined in United Nations Security Council resolutions. The United Nations Security Council's resolution on Monday supported US President Biden's ceasefire plan.
Two security affairs officials in Egypt told reporters that Hamas also wanted written guarantees from the United States on the ceasefire plan.
Earlier on Wednesday, Hamas Political Bureau member Izzat al-Rishq said that Hamas's formal response to the US proposal was "responsible, serious, and positive," and that it had opened up a "broad road" to reach an agreement.
Biden's proposal envisages a ceasefire and a phased release of Israelis held in Gaza in exchange for Palestinians held in Israel, ultimately ending the war permanently.
Blinken said at a news conference with the Qatari prime minister in Doha on Wednesday that some of the revisions proposed by Hamas sought to modify the terms they had accepted in previous negotiations.
"Hamas could have answered in one word: yes," Blinken said. "Instead, Hamas waited for almost two weeks and then proposed more changes, some of which went beyond the positions Hamas had previously taken and accepted."
The United States said that Israel had accepted the US proposal, but Israel has not publicly expressed its position. Blinken said that the United States would propose ideas for managing and rebuilding Gaza after the conflict in the coming weeks. "We must plan for the day after the Gaza conflict ends, and we need to draw up a plan as soon as possible," he said.
Major powers are stepping up efforts to resolve the conflict, in part to prevent it from escalating into a wider Middle East war. Hostile actions on the Lebanon-Israel border are a dangerous flashpoint.
Iran-backed Lebanese Hezbollah fired a large number of rockets at Israel on Wednesday in retaliation for the killing of a senior battlefield commander of Hezbollah. Israel said its warplanes subsequently attacked the launch site in Lebanon. Hezbollah official Hashem Safieddine vowed the group would expand its action against Israel.
A United Nations investigation report pointed out that Israel and Hamas committed war crimes in Gaza, with Israeli actions causing a large number of civilian deaths, constituting crimes against humanity.
As diplomats sought to reach a ceasefire agreement, Israel continued to launch attacks in central and southern Gaza. Local residents said that Israeli forces bombed various parts of Gaza on Wednesday, with tanks advancing towards the north of Rafah city.
However, the Federal Reserve's decision to delay interest rate cuts until December disappointed investors. Policymakers expect only one rate cut this year, a 25-basis-point reduction, and believe that more restrictions need to be imposed on the economy to control inflation.
The US Consumer Price Index (CPI) data released earlier on Wednesday had already strengthened expectations of a Fed rate cut in September.
Economist Tim Snyder of Matador Economics said, "If Powell's remarks contain something that the Fed's statement does not, there may be some disagreement within the committee on the direction of interest rates.
EIA data also put pressure on oil prices. The US Energy Information Administration (EIA) said on Wednesday that crude oil inventories had jumped by 3.7 million barrels to 459.7 million barrels in the week ending June 7, while analysts had expected a decrease of 1 million barrels. US gasoline inventories rose by 2.6 million barrels last week to 233.5 million barrels, while analysts had expected an increase of 900,000 barrels.
However, in the long term, the EIA, the International Energy Agency (IEA), and OPEC all released their latest views on global oil supply and demand balance in 2024 this week, and it is expected that global oil inventories will decline.
The International Energy Agency (IEA) said on Wednesday that global oil demand will peak by 2029 and begin to decline the following year, while oil supply will greatly exceed demand by 2030.
IEA believes that oil supply capacity will reach nearly 114 million barrels per day by 2030, which is 8 million barrels per day higher than the demand estimated in its annual oil report.
Fatih Birol, IEA's Executive Director said, "This report based on the latest data and forecasts reveals a substantial supply surplus for this decade, indicating that oil companies may need to ensure that their business strategies and plans are prepared for ongoing changes."
IEA said that by 2029, oil demand growth will reach a high of 105.6 million barrels per day, with a slight contraction in 2030 as the use of electric cars increases, efficiency improves, and power generation no longer uses oil.
IEA has lowered its forecast for oil demand growth in 2024 by 100,000 barrels per day to 960,000 barrels per day, citing weak consumption in developed countries, with economic slowdown and the use of green energy driving a 1 million barrels per day increase next year.
Dennis Kissler, an analyst at BOK Financial, said IEA's assertion that there will be a large surplus and idle capacity in oil by 2030 is unfavorable to oil prices. However, most traders are skeptical because demand for global refineries is still very strong and the growth of electric cars seems to be slowing down.
Citi expects Brent crude futures prices to fall to $60 a barrel next year. Citi noted that influenced by geopolitical conflicts and oversupply factors, Brent crude futures prices are expected to remain at $82 a barrel in the third quarter, and then start to decline, further under pressure next year. Citi recommends investors hedge against downside risks to oil prices.
Attention needs to be paid to the US initial jobless claims and May PPI data, to the speeches of Fed officials, and to the further interpretation of the Fed's decision. Pay attention to geopolitical news.
(Daily chart of crude oil in the United States, source: Easy-Forex)
At 08:48 Beijing time, US crude oil is reported at $78.32 per barrel.