Oil drifted higher after the biggest two-day decline since 2022 as President Donald Trump downplayed the prospects of near-term sanctions relief for Iran and a government report showed a large drop in US crude stockpiles.
West Texas Intermediate edged up 0.9% to settle just below $65 a barrel, after slumping 14% over the previous two sessions. Trump said the US would hold a meeting with Iran next week, but maintained that he is “not giving up” a maximum-pressure campaign targeting Tehran’s petrodollars. Still, he declared the tensions in the region as “over.”
Elsewhere, US government data showed the country’s crude inventories fell for the fifth straight week, dropping by 5.8 million barrels to sit at an 11-year seasonal low. The data bolstered WTI’s prompt spread — the difference between its two nearest contracts — to $1.46 a barrel in backwardation, a bullish structure that signals a tight near-term market.
Limiting the rally, Bloomberg reported that Russia is open to another output hike at the next OPEC+ meeting if the alliance deems such an increase to be necessary, after pushing back against further production increases in a previous meeting. The OPEC+ alliance is due to hold discussions on July 6 to consider a further supply boost in August.
“Today’s move in crude looks like a combination of factors: a technical bounce after an oversold selloff, a walk-back of yesterday’s surprise comments on Iranian sanctions, and supportive EIA data,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. “While the second-half outlook still points to a surplus, and bearish sentiment remains, near-term balances look tighter than the broader narrative suggests.”
Trump’s comments appeared to reverse his remarks on Tuesday giving China, Iran’s biggest crude customer, the green light to carry on buying its oil. The announcement on social media — which baffled investors and government officials alike — signaled a policy shift that could undermine years of US sanctions against Tehran.
Still, the dust is beginning to settle in a global oil market that has been on a wild ride this week, marked by the biggest daily price swing in almost three years. The rocky trading has been amplified by huge trading volumes in options markets, while the closely-watched oil futures curve has also returned to its pre-war levels.
Meanwhile, Trump’s self-imposed deadline to reach trade deals with major US partners falls on July 9. Nations without an accord in place will face the so-called “Liberation Day” tariffs.
Oil Prices
WTI for August delivery rose 0.9% to settle at $64.92 a barrel in New York.
Brent for August settlement climbed 0.8% to settle at $67.68 a barrel.
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