Crude oil futures traded marginally up on Thursday morning even as markets pinned hopes on an extension of the US-Iran ceasefire, which is set to expire on April 21.
At 9.23 am on Thursday, June Brent oil futures were at $94.95, up by 0.02 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $91.65, up by 0.39 per cent. April crude oil futures were trading at ₹8558 on Multi Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹8608, down by 0.58 per cent, and May futures were trading at ₹8288 against the previous close of ₹8352, down by 0.77 per cent.
In their Commodities Feed for Thursday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said the oil market continues to edge lower amid hopes that the US and Iran extend their ceasefire by another two weeks, along with a potential resumption in talks to bring an end to the war.
However, the physical market is becoming tighter every day that passes without a restart of oil flows through the Strait of Hormuz.
“After taking into consideration pipeline diversions and the trickle of tankers through the Strait of Hormuz, we estimate that roughly 13 million barrels a day has been disrupted. But with the US blockade, this number could creep higher,” they said.
The divergence between the futures and physical markets is clear: dated Brent traded around $117 a barrel, while front-month Brent futures settled a little below $95 a barrel on Wednesday. The key upside risk for the market is that peace talks between the US and Iran break down. This isn’t an unrealistic scenario, given that US and Iranian demands remain fairly wide apart.
The latest data from the US Energy Information Administration (EIA) shows that US crude oil exports jumped by 1.08 million barrels a day week-on-week to 5.23 million barrels a day – the highest volume since September 2025.
They said that these stronger US exports reflect buyers turning to other markets for supply amid disruptions in West Asia. Despite strong exports, US crude oil inventories declined only marginally over the week, falling by 913,000 barrels. Refined product stocks saw more meaningful declines, with gasoline and distillate inventories falling by 6.33 million barrels and 3.12 million barrels, respectively.
Mentioning that the US drilling activity has barely moved since the start of the conflict, they said the US oil rig count stood at 411 last week, up from 407 prior to the war.
“The lack of drilling activity also ties in with the EIA’s domestic crude oil production forecasts, which suggest little change in output this year. If we see a pickup in US drilling activity, it would have a more meaningful impact on oil output over 2027,” they added.
Meanwhile, US President Donald Trump said that Israel and Lebanon will hold talks on Friday. In a post on the social media platform Truth Social, he said: “Trying to get a little breathing room between Israel and Lebanon. It has been a long time since the two leaders have spoken, like 34 years. It will happen tomorrow. Nice!”