Oil prices today: Why are International oil rates rising after two days of ​losses?

Oil prices rebounded on Thursday after two days of losses on outstanding supply concerns because of the uncertain outlook for an end to the Iran war and a U.S. inventory draw raised worries about the depletion of global stockpiles.

Brent crude futures rose 81 cents, or 0.77 per cent, to $105.83 a barrel, and U.S. West Texas Intermediate futures were up 97 cents, or 0.99 per cent, at $99.23. Both benchmarks dropped ‌more than 5.6 per cent ⁠on ⁠Wednesday after U.S. President Donald Trump said negotiations with Iran were in the final stages, but he also threatened further attacks if it did not agree to a peace deal.

Iran warned against further attacks and announced steps entrenching its control of the crucial Strait of Hormuz waterway, which before the war carried oil and liquefied natural gas shipments equal to about 20 per cent of global consumption but has been mostly closed.


"The sharp drop in oil prices ​appears to be pricing in the possibility of a breakthrough ⁠in the talks," ‌said Yang An, analyst at Haitong Futures.

"However, if Trump insists on making ​no concessions to ​Iran, an agreement seems unlikely, and the final outcome of the negotiations could reverse ⁠sharply," Yang said. On Wednesday, Iran announced a new "Persian Gulf Strait Authority," ​saying there would be a "controlled maritime zone" in the Strait of Hormuz.

Iran ​effectively closed the strait in retaliation to U.S. and Israel attacks that started the war on February 28. Most of the fighting has stopped since an April ceasefire but while Iran is limiting traffic through Hormuz, the U.S. has blockaded its coastline.

The supply losses from the key Middle Eastern region because of the war have forced countries to pull from their commercial and strategic inventories at a rapid ‌rate, raising concerns about draining them. The U.S. Energy Information Administration said on Wednesday the country withdrew nearly 10 million barrels of oil from its Strategic Petroleum Reserve last ​week, the ​biggest drawdown on record. The EIA also ⁠said commercial crude inventories fell by 7.9 million barrels to 445 million barrels last week, compared with analysts' expectations in a Reuters poll for a 2.9 million-barrel draw.

Gasoline inventories fell by 1.5 million barrels, ​while distillates rose by 372,000 barrels.