The developments compounded speculation about possible supply disruptions in the Middle East after AFP reported that Iran threatened to target US military bases in the region if conflict breaks out.<\/p>\n
\u201cIranian rhetoric has turned notably more hostile, and these threats are being substantiated by real-world developments,\u201d said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. \u201cWhile geopolitical rallies are often seen as selling opportunities, this situation carries the added complexity of potential Israeli military action if negotiations break down, which is keeping traders more cautious about selling into the rally.\u201d<\/p>\n
Elsewhere, President Donald Trump told the New York Post he\u2019s \u201cless confident\u201d about whether he can convince Tehran to agree on shutting down its nuclear program. He also posted on social media that a trade\u00a0deal<\/a>\u00a0with China was \u201cdone,\u201d subject to the approval of President Xi Jinping.\u00a0<\/p>\n Oil had been weighed down by expectations that a trade war between the world\u2019s two largest economies would hurt demand and that a deal with Iran would bring back sanctioned barrels, adding to rising OPEC+ supplies. Prices have recovered in recent sessions, supported by easing trade tensions and the outlook for summer demand.\u00a0<\/p>\n A monthly report from the US Energy Information Administration underscored the oil market\u2019s current uncertainties. While the agency expects supply to eclipse demand by 800,000 barrels a day this year, the most since it began publishing a forecast for 2025, it also doesn\u2019t see US crude\u00a0production<\/a>\u00a0topping last month\u2019s levels before the end of next year, a sign that lower prices are curbing some supply.\u00a0<\/p>\n Signs of market tightness have also appeared along the futures curve. Earlier this week, the February-March WTI spread flipped to backwardation \u2014 where near-term prices are higher than longer-dated ones \u2014 for the first time since April, with several subsequent months following suit earlier today, signaling concerns about oversupply are easing.\u00a0<\/p>\n
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