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At 10:48 GMT, Light Crude Oil Futures are trading $62.63, down $0.60 or +0.97%.
Middle East Tensions Lift Crude as Iran-Israel Fears Mount
The upside in oil prices was driven largely by reports that Israel could be preparing a strike on Iranian nuclear facilities. Citing multiple U.S. officials, CNN reported that Israeli military plans are in motion, though a final decision has not been confirmed. The possibility of such an escalation is raising alarms across energy markets.
ING analysts noted that an Israeli strike could not only threaten Iran’s exports—over 1.5 million barrels per day—but also pose a broader regional supply risk. UBS analyst Giovanni Staunovo added that any disruption from Iran, OPEC’s third-largest producer, could push prices further. The Strait of Hormuz, a critical chokepoint for global crude flows, could be vulnerable to retaliation.
OPEC+ Compliance Concerns Add Bearish Undercurrent
While geopolitical risks dominate the headlines, supply-side developments are injecting caution. Kazakhstan’s oil output reportedly rose 2% in May, despite OPEC+ urging members to stick to production limits. Any further non-compliance could undermine the group’s efforts to stabilize prices.
Meanwhile, U.S. inventory data presents a mixed picture. According to API estimates, crude stockpiles rose last week while gasoline and distillate levels declined. Traders are now awaiting the official EIA report for confirmation and further direction. Analysts estimate a 900K barrel draw in today’s report, due to be released at 14:30 GMT.
Crude Oil Market Outlook: Bullish Near-Term Bias Holds
Despite intraday pullbacks, the short-term outlook remains bullish as geopolitical risks in the Middle East amplify the potential for supply disruptions. Technical levels will continue to play a defining role, with sustained trade above the 50-day moving average reinforcing the upward bias. Traders should stay alert to EIA data and further signals from OPEC+ compliance, but for now, the risk-reward favors higher prices.
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