Oil Markets Steady After Rout as Ceasefire and Supply Surge Shift Sentiment

Oil prices stabilized on Wednesday morning after two days of sharp declines, as traders reacted to the fragile ceasefire between Iran and Israel and weighed the impact of rising supply against uncertain demand.

According to official exchange data and market charts, Brent crude futures rose to $67.99 per barrel, up 1.3%, while West Texas Intermediate (WTI) crude gained 1.1% to $65.08.

Both benchmarks had reached their lowest levels in weeks by Tuesday, following a rapid sell-off that erased gains made during the recent Middle East conflict.

The recent volatility began after U.S. President Donald Trump brokered a ceasefire between Iran and Israel, ending nearly two weeks of hostilities that had threatened oil flows through the Strait of Hormuz, a key route for almost 20% of global crude shipments.

The risk premium built into prices during the conflict evaporated quickly as both sides signaled a halt to aerial attacks and eased civilian restrictions. U.S. intelligence assessments indicated that the strikes on Iran’s nuclear facilities only delayed, but did not eliminate, its capabilities.

Market fundamentals have shifted focus back to supply and demand. OPEC+ accelerated its production increases, with 411,000 barrels per day returning to the market in June alone.

ING Group’s latest report lowered its Brent forecast for 2025 to $65 per barrel, citing weak demand and OPEC+’s move to regain market share. The group may restore up to 1 million barrels per day in just three months, well ahead of its original schedule.

Analysts expect global oil production to rise by up to 1.4 million barrels per day this year, driven by non-OPEC+ countries and a rebound in Iranian exports. On the demand side, uncertainty persists.

Oil Market Shifts from Rally to Supply-Driven Correction

The U.S. Energy Information Administration forecasts global oil surpluses and expects WTI to average $62 per barrel in the second half of 2025. Weakness in global economic growth, particularly in China, and ongoing trade disputes have dampened demand expectations.

U.S. crude inventories fell last week, but the drawdown was not enough to offset bearish sentiment from rising supply. Technical analysis of the latest 4-hour and daily price charts for Brent and WTI shows both benchmarks sitting at key support levels.

The 4-hour charts reveal a steep decline halted at long-term trendlines, with Relative Strength Index (RSI) readings below 35 indicating oversold conditions. The Moving Average Convergence Divergence (MACD) remains negative, but the histogram shows signs of a potential bottoming.

On the daily charts, prices have broken below major moving averages, confirming a bearish trend, but RSI and MACD suggest selling momentum may be slowing. Exchange-traded oil products saw record outflows as investors took profits after the recent rally.

The world’s largest Brent oil ETC posted its biggest withdrawals since inception, reflecting a shift in sentiment as the geopolitical risk faded.

In summary, the oil market has moved from a war-driven rally to a supply-driven correction, with prices finding temporary support after a historic rout.

The next moves will depend on the durability of the ceasefire, OPEC+ supply decisions, and signals from global demand. Traders now watch for further inventory data and official statements to gauge whether the recent stabilization will hold or if more volatility lies ahead.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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