Oil Retreats After Sharp Rally as Markets Assess Middle East Developments and U.S. Inventory Data

Oil prices eased in Asian trading on Thursday as investors assessed developments in the Middle East and the latest U.S. inventory data following strong gains in the previous session. Brent crude fell 0.9% to $89.92 a barrel, while WTI crude slipped 0.6% to $83.94 as of 00:50 GMT.

Market Drivers

Brent rose nearly 8% and WTI gained 6.6% in the previous session amid heightened geopolitical tensions in the Middle East.

According to Reuters, President Donald Trump said Iran would face a strong response following recent regional developments. Markets also continued to monitor reports of military activity involving Iran, the United States and regional armed groups.

Regional Developments

Market participants continued to monitor reports of incidents affecting energy infrastructure and shipping in the Middle East.

Recent developments have included reports of incidents involving natural gas vessels near Egypt, continued security concerns around the Bab el-Mandeb Strait, and relatively limited traffic through the Strait of Hormuz.

Investors are assessing whether these developments could affect regional energy transportation and global supply chains.

Inventory Data

The U.S. Energy Information Administration (EIA) reported that U.S. crude oil inventories declined by 7.2 million barrels last week, exceeding market expectations and bringing stockpiles to their lowest level since 2018.

Market Focus

Market participants are likely to continue monitoring developments in the Middle East, shipping activity through key maritime routes, and upcoming supply data, as these factors may influence expectations for global oil supplies and price movements.

Sources: U.S. Energy Information Administration (EIA); Reuters.