Oil Prices Drop After Lebanon-Israel Ceasefire Agreement

• The U.S. House approved a resolution to block President Trump from continuing the war with Iran, though it would require Senate approval and faces a likely presidential veto
• U.S. crude stockpiles rose by 8 million barrels to 433.7 million barrels, double the expected 4-million-barrel draw forecasted by analysts
• Trump indicated potential progress in Iran negotiations as soon as this weekend, though Iran's Foreign Minister said contacts continue but no progress has been made

Oil Prices Decline on Lebanon-Israel Ceasefire and Diplomatic Developments

Market Movement:

Oil prices fell Thursday following a ceasefire agreement between Israel and Lebanon, raising hopes for broader resolution to the U.S.-Israeli conflict with Iran. Brent crude dropped 67 cents (0.69%) to $97.14 per barrel, while West Texas Intermediate declined 62 cents (0.65%) to $95.40 by 0015 GMT. Both benchmarks had risen approximately 2% on Wednesday after Middle East tensions escalated with Iranian attacks on Kuwait and U.S. military strikes near the Strait of Hormuz.

Political Developments:

The Republican-led U.S. House approved a resolution to block President Trump from continuing the war with Iran, though it requires Senate approval and two-thirds majorities in both chambers to override an expected presidential veto. Trump indicated potential progress in Iran negotiations as early as this weekend. Iranian Foreign Minister Abbas Araqchi confirmed ongoing contacts with Washington but reported no breakthrough in negotiations, with both sides reviewing exchanged texts.

Supply Data:

U.S. crude inventories increased by 8 million barrels to 433.7 million barrels for the week ended May 29, according to the Energy Information Administration. This significantly exceeded analyst expectations of a 4-million-barrel draw.

Market Outlook:

Despite the ceasefire-driven decline, Haitong Futures projects oil prices will likely trend toward the upper end of their range due to persistent supply-demand imbalances and rapidly falling global crude inventories.

Key Geopolitical Factor:

The Strait of Hormuz remains a critical flashpoint, with recent military activity highlighting ongoing supply route vulnerabilities in the region.