In a statement posted on his X page today, Ole S. Hansen, Head of Commodity Strategy at Saxo Bank, highlighted that crude oil is trading higher for a third consecutive session.
Hansen pointed out in the statement that the Brent price was trading above $97 per barrel “as market pessimism once again grows over the prospects of a U.S.-Iran deal that could pave the way for a reopening of the Strait of Hormuz”.
“The latest escalation saw U.S. forces intercept Iranian missiles and drones before striking an Iranian command center in response,” Hansen noted in the statement.
“For now, the risk premium continues to be partly offset by President Trump’s repeated insistence that an interim agreement remains within reach,” he added.
Hansen went on to highlight in the statement that “attention now turns to the EIA’s [U.S. Energy Information Administration] weekly inventory report after the API [American Petroleum Institute] reported a 6.8 million barrel decline in U.S. crude stocks”.
The Saxo Bank representative outlined that, if a crude stock decline is confirmed, it would mark a sixth consecutive weekly drawdown.
“Traders will also be watching inventories at Cushing, Oklahoma, where stockpiles have fallen to around 23 million barrels, not far above the roughly 20 million barrel level widely considered the operational minimum,” Hansen said in the statement.
The EIA’s next weekly petroleum status report is scheduled to be released later today.
In a market analysis sent to Rigzone on Wednesday, Naeem Aslam, CIO at Zaye Capital Markets (ZCM), outlined that analysts at ZCM see crude moving higher “because the market is pricing a fresh geopolitical risk premium, tighter inventories, and uncertainty around physical supply”.
“Renewed Middle East hostilities, stalled talks, and shipping route concerns are keeping traders focused on supply security,” he added. Aslam also outlined that reports of a 6.8 million barrel U.S. crude stock draw “strengthen the tightening narrative”.
“The reason oil Is moving up and down at the same time is because supply fear is fighting demand caution,” Aslam went on to state.
“On the bullish side, the IEA [International Energy Agency] warned that global inventories could reach critically low levels before peak summer demand, while the Strait of Hormuz disruption remains a major supply chain risk,” he said.
“On the bearish side, higher oil prices can create demand destruction, and the latest IEA data showed global oil demand expected to contract by 2.4 million barrels per day year-over-year in Q2 2026 and decline by 420,000 barrels per day for 2026 as a whole,” he added.
“OPEC remains important because any production decision affects the supply cushion, but in this market, announced supply increases matter less if shipping, inventories, and physical barrels remain constrained,” he noted.
OPEC+’s next meeting is currently scheduled to take place on June 7, according to OPEC’s website.
Aslam also outlined in the analysis that U.S. President Donald Trump’s comments are creating a mixed oil signal and that Tuesday’s data left crude with a split sentiment.
“April JOLTS showed the quits rate fell to 1.9 percent from 2.0 percent, while the hires rate dropped to 3.2 percent from 3.5 percent, pointing to softer labor market churn,” he said.
“Construction spending rose 0.4 percent month over month to a US $2.172 trillion annualized pace, beating the 0.2 percent estimate, with private residential spending up 0.8 percent and private nonresidential spending down 0.2 percent,” he added.
“ISM Manufacturing rose to 54.0, new orders climbed to 56.8, and employment stayed in contraction at 48.6,” he continued.
Aslam noted that, today, “stronger ADP Non-Farm Employment Change and ISM Services PMI would support oil through firmer demand expectations, while weaker numbers would pressure crude through growth concerns unless geopolitical supply risk dominates”.
“The Treasury Secretary’s speech will matter through dollar, inflation, debt, and trade signals, because those channels decide whether oil trades more like a growth asset or a supply-shock hedge,” he said.
Rigzone has contacted the White House and the Iranian Ministry of Foreign Affairs for comment on Hansen and Aslam’s statements. At the time of writing, neither have responded to Rigzone.
In a research note sent to Rigzone this week, Paul Bloxham, HSBC Chief Economist, Australia, NZ, and Global Commodities, highlighted that “the (largely) closed Strait of Hormuz remains the focus for commodity market observers”.
“That being said, after rising sharply in February and March, global commodity prices have edged up only a little, at high levels, for the past two months,” he added.
“Commodity markets have, so far, absorbed the shock better than some of the worst-case scenarios, reflecting high inventories before the conflict and rapid shifts to redirect commodity trade,” he continued.
“However, the longer the Strait is closed, the more inventories are run down, the more likely it is that we reach ‘tipping points’ in the markets for some commodities,” Bloxham warned.
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