Oil Slips as Israel-Lebanon Ceasefire Boosts Hopes for Regional Stability

Crude oil prices moved slightly lower on Thursday after a ceasefire agreement between Israel and Lebanon improved market sentiment and raised expectations for broader diplomatic progress in the Middle East.

August Brent crude futures were trading at $97.18/bbl, down $0.63/bbl, while July WTI crude futures eased $0.49/bbl to $95.53/bbl.

The decline came after oil prices had risen sharply in the previous session amid escalating regional tensions, including military developments near the Strait of Hormuz and renewed conflict-related concerns. However, the announcement of a ceasefire shifted market focus toward the possibility of wider de-escalation across the region.

Market participants are also closely watching ongoing discussions between the US and Iran. Recent comments from US officials suggested that negotiations could make further progress in the coming days, although Iranian representatives indicated that talks remain ongoing and no final breakthrough has yet been achieved.

Despite the softer price movement, supply-side concerns continue to provide support to the market. US crude inventories reportedly fell by around 8 million barrels during the latest reporting week, significantly exceeding market expectations.

Analysts also noted that even if shipping flows through the Strait of Hormuz normalize, global oil supply chains may require time to fully recover, which could keep inventories relatively tight during the coming months.

Overall, optimism surrounding diplomatic developments weighed on prices, while ongoing supply concerns helped prevent a sharper decline in the crude market.

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