Oil prices fall more than 3% on Wednesday

Global oil prices fell more than 3 per cent on Wednesday, reversing earlier gains as uncertainty over the Middle East conflict unsettled markets despite indications that the US-Israeli war with Iran could ease.

Brent crude for June dropped $3.33, or 3.2 per cent, to $100.64 per barrel, while US West Texas Intermediate crude for May declined $3.34, or 3.3 per cent, to $98.04. Prices had risen earlier in the session but turned lower as investors moved to lock in profits.

Analysts said the decline reflected profit-taking and cautious sentiment after signals from Donald Trump that the conflict could end within weeks. However, concerns over supply disruptions persisted, with potential damage to infrastructure and delays in restoring shipping flows expected to keep markets tight.

The Strait of Hormuz remains a critical risk, accounting for around 20 per cent of global oil and liquefied natural gas trade, with tanker movements and insurance costs likely to take time to normalise even if tensions ease.

Supply pressures were further highlighted by a sharp drop in OPEC output and a recent decline in US production following severe weather disruptions, reinforcing expectations of continued volatility in global energy markets.

Attribution: Reuters