Oil Eases as Trump Claims War with Iran Will End Very Quickly

Oil prices eased on Wednesday after U.S. President Donald Trump again asserted the war ‌with Iran will end "very quickly", though investors remain wary about the outcome of peace talks amid continued disruptions to Middle East supply from the ​conflict. Brent crude oil futures fell 45 cents, or 0.4%, to US$110.83 a barrel by 0050 GMT, while U.S. West Texas Intermediate futures ​were down ​27 cents, or 0.3%, to US$103.88. Both benchmarks fell nearly US$1 on Tuesday after U.S. Vice President JD Vance said the U.S. and Iran had made progress in talks, with neither side wanting to see a resumption ⁠of military action. "Investors are keen to gauge whether Washington and Tehran can actually find common ground and reach a peace agreement, with the U.S. stance shifting daily," said Toshitaka Tazawa, an analyst at Fujitomi Securities. "Oil prices are likely to remain elevated given the possibility of renewed U.S. attacks on Iran and expectations that, even if a peace deal is reached, ​crude supply will ‌not quickly return to ⁠pre-war levels," he said. Despite ⁠Trump's assertion to U.S. lawmakers late on Tuesday about a quick end to the conflict, he earlier said the United States ​may need to strike Iran again and he had been an hour away from ‌ordering an attack before postponing it. His comments on the need to ⁠strike again came a day after he said he had paused a planned resumption of hostilities following a new proposal by Tehran to end the U.S.-Israeli war. In his remarks on Tuesday Trump also said Iran's leaders are begging for a deal and warned a new U.S. attack would happen in coming days if no agreement was reached. The U.S.-Israeli war against Iran has caused the effective closure of the Strait of Hormuz, which normally carries about a fifth of global oil supplies, creating the world's biggest oil supply disruption, according to the International Energy Agency. Citi on Tuesday said it expects Brent crude to rise to US$120 a barrel in the near term, stating that ‌oil markets are under-pricing the risk of a prolonged supply disruption and broader tail ⁠risks. To make up the shortfall in global supplies from the war, countries ​are relying on their commercial and strategic inventories. In the U.S., crude oil inventories fell for a fifth straight week last week, according to market sources citing American Petroleum Institute data released on Tuesday, while fuel stocks also fell. U.S. crude stockpiles reported by ​the Energy Information Administration ‌are expected to have fallen by about 3.4 million barrels in the week to May ⁠15, according to a Reuters poll. The weekly ​EIA data is due later on Wednesday. - Zawya