After a sharp drop in oil prices, the market may transition into a consolidation phase. Freedom analysts believe that initial optimism surrounding a potential agreement between the U.S. and Iran has not yet been supported by tangible progress in negotiations. The downside potential for prices appears limited.
Last week, WTI crude oil declined by 10.6%, settling at $75.9 per barrel — its lowest level since early March. The main bearish factor remains expectations of a deal between Washington and Tehran, which could lead to the resumption of Iranian oil exports and increase global supply. However, analysts note that the current détente between the U.S. and Iran appears fragile; under these circumstances, the market may reassess overly optimistic supply outlooks.
Further support for oil prices comes from U.S. Department of Energy data. Commercial crude inventories fell by 8.3 million barrels to 418.2 million barrels, while total liquid hydrocarbon stocks are now at their lowest level in 22 years. At the same time, U.S. fuel demand rose by 0.7 million barrels per day to 15 million barrels per day, signaling resilient consumption.
Meanwhile, U.S. oil production remained nearly unchanged at 13.8 million barrels per day, and drilling activity increased only marginally — the total number of active rigs rose by one to 563 units.
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