In Brief:
- WTI crude climbed 1.3% to $59.97, while Brent rose to $64.57, recovering from a sharp 4.5% plunge earlier in the week.
- Prices steadied after President Trump withdrew immediate threats of a military strike on Iran, noting signs that crackdowns on domestic protests were easing.
- Gains remain capped by bearish fundamentals, as the EIA reported a 3.4 million-barrel jump in US crude stocks and projected a global surplus through 2026.
Crude oil prices were stable by 13:50 GMT on Friday, with US West Texas Intermediate (WTI) rising to $59.97 per barrel and Brent crude climbing to $64.57.
The bounce follows a volatile week where the energy sector surrendered its recent gains, ending a five-day rally that had been driven by fears of a major Middle Eastern conflict.
The primary driver for the recent price retreat was a significant de-escalation in rhetoric from Washington.
On Thursday, President Donald Trump indicated a pause in plans for military strikes against Iran, stating he had received reports that violent crackdowns on demonstrators were subsiding. This shift relieved immediate concerns regarding the Strait of Hormuz, a critical chokepoint through which approximately 20% of global oil flows.
While geopolitical risks have receded, the market is now refocusing on a growing supply-demand imbalance. Data released this week by the US Energy Information Administration (EIA) showed a surprise 3.4 million-barrel increase in commercial crude inventories, significantly higher than the draws many analysts had expected. Additionally, gasoline stocks jumped by a massive 9 million barrels, suggesting that while refinery runs remain high, consumer demand has yet to catch up.
Looking further ahead, the EIA’s latest Short-Term Energy Outlook (STEO) projects a “chronic oversupply” for the remainder of 2026. The agency expects Brent crude to average just $55.87 per barrel this year as global production, particularly from non-OPEC+ sources in South America, outpaces consumption.
With US markets closed this coming Monday for Martin Luther King Jr. Day, trading volume is expected to thin out. However, analysts warn that oil remains “headline-sensitive.” Any renewed instability in Iran or sudden shifts in US policy toward Venezuelan oil exports could trigger significant price gaps when global markets reopen.