Brent Oil eases to levels near $96.00 after Israel and Lebanon ceasefire agreement

 Crude prices show a moderate reversal on Thursday, with Brent crude, the global oil benchmark, trading around $96 per barrel during the European trading session, down from highs at $98.00 on Wednesday. The price of the Brent barrel, however, remains nearly 5% up on the week as recent developments in the Middle East push back hopes of a swift end to the war and the reopening of the Strait of Hormuz.

News that Israel and Lebanon have agreed to implement the ceasefire triggered a mild relief on Thursday, yet far from an enthusiastic market reaction. Investors remain concerned by the deterioration of the relations between the US and Iran following hostilities earlier this week and Tehran’s announcement of the suspension of the peace talks with Washington.

In the US, the House of Representatives passed a resolution to block US President Donald Trump’s war powers, though it is unlikely to come into effect. The resolution will now be sent to the Senate and will require approval from two-thirds of both chambers if Trump vetoes it. 

On Wednesday, data released by the Energy Information Agency (EIA) revealed that US Crude Oil stocks declined by 7.97 million barrels in the week of May 29, nearly twice the 4 million barrels drop expected, and following a 3.32 million drawdown in the previous week. These figures highlight the rapid depletion of global Oil reserves, and keep prices from dropping further amid concerns of an Oil shortage if the key Strait of Hormuz remains closed for a protracted period.