Oil Prices Holding Firm

Oil prices are “holding firm” today “as the market digests a sharp pullback from war-driven panic levels”, Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, said in a statement sent to Rigzone on Thursday.

“Diplomatic signals that the Iran conflict may be winding down and talks could resume have stripped out much of the short-term supply disruption premium, especially fears over the Strait of Hormuz,” Aslam said in the statement.

“Yet the floor remains solid: a decent U.S. crude inventory draw, lingering sanctions risk, and unresolved shipping threats are preventing any collapse,” he added.

“Meanwhile, softer U.S. jobless claims and the contrasting outlooks from OPEC and the IEA [International Energy Agency] - with the IEA slashing its 2026 demand forecast while OPEC sticks to robust growth and supply discipline - highlight a market caught between de-escalation relief on one side and stubborn geopolitical supply risks plus managed production on the other,” he continued.

Aslam concluded in the statement that the net result is a “tense, elevated range rather than a clear directional break”.

In a report sent to Rigzone late Tuesday by the Standard Chartered team, Standard Chartered Bank Energy Research Head Emily Ashford noted that, “one week ago, Brent crude prices corrected sharply lower, on optimism of a two-week ceasefire and talks between the U.S. and Iran”. Ashford highlighted in that report that Brent dropped “from a high of $111.80 per barrel on 7 April to a 28-day low of $90.40 per barrel on 8 April”.

The U.S. Energy Information Administration’s (EIA) latest weekly petroleum status report, which was released on April 15 and included data for the week ending April 10, highlighted that U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), decreased by 0.9 million barrels from the week ending April 3 to the week ending April 10.

In its latest Oil Market Report, which was released on April 14, the IEA stated that oil demand “is expected to contract by 80,000 barrels per day this year” as the Iran war “upends” its global outlook.

“This is 730,000 barrels per day less than in last month’s report and a forecast 1.5 million barrels per day 2Q26 decline would be the sharpest since Covid-19 slashed fuel consumption,” the IEA highlighted.

“Initially, the deepest cuts in oil use have come in the Middle East and Asia Pacific, mainly for naphtha, LPG and jet fuel. However, demand destruction will spread as scarcity and higher prices persist,” the IEA warned in the report.

OPEC’s latest monthly oil market report, which was released on April 13, stated that global oil demand “is forecast to grow by a healthy 1.4 million barrels per day in 2026, year on year, unchanged from last month’s assessment”.

“The OECD is forecast to grow by 0.1 million barrels per day, while the non-OECD is forecast to grow by about 1.3 million barrels per day,” the report added.

A statement posted on OPEC’s website on April 5 revealed that Saudi Arabia, Russia, Iraq, the UAE (United Arab Emirates), Kuwait, Kazakhstan, Algeria, and Oman decided to boost production by 206,000 barrels per day in May.

A briefing newsletter from Goldman Sachs, which was sent to Rigzone on April 10, noted that, according to Goldman Sachs Research, “the path of oil prices will depend on the extent and speed of any recovery in traffic through the Strait of Hormuz”. The newsletter described the Strait as “a critical trade route through which about one-fifth of global oil supply normally flows”.

In a commodities note sent to Rigzone on the same day, Ole S. Hansen, Head of Commodity Strategy at Saxo Bank, said the trajectory for crude will likely depend on two competing forces.

“Further downside would require additional long liquidation and a sustained improvement in geopolitical risk,” Hansen said in the note.

“Conversely, any renewed disruption or delay in restoring normal shipping flows would quickly reassert upward pressure, not only in the prompt market where inventories remain tight, but also along the futures curve as traders price in a prolonged period of tightness and higher prices,” he added.

To contact the author, email andreas.exarheas@rigzone.com