Donald Trump said Israel and Lebanon will extend their ceasefire by three weeks, Bloomberg reported on Thursday. The ceasefire had been due to expire on 26 April.<\/p>\n
Trump said he would host Israeli Prime Minister Benjamin Netanyahu and Lebanon President Joseph Aoun in the near future. He also said the US would work with Lebanon to help it protect itself from Hezbollah.<\/p>\n
At the time of writing, West Texas Intermediate (WTI) was up 3.80% on the day at $95.45. WTI is a US-sourced crude oil benchmark traded internationally, alongside Brent and Dubai Crude.<\/p>\n
WTI prices are mainly driven by supply and demand, as well as global growth trends. Political instability, wars, sanctions, OPEC production decisions, and the value of the US Dollar can also affect prices.<\/p>\n
Weekly US inventory reports from the American Petroleum Institute and the Energy Information Agency can move WTI prices. API figures are published on Tuesdays and EIA figures the next day, with results falling within 1% of each other 75% of the time, and EIA data viewed as more reliable because it is from a government agency.<\/p>\n
OPEC has 12 member nations and sets production quotas at twice-yearly meetings. OPEC+ includes 10 additional non-OPEC members, including Russia.<\/p>\n
The extension of the ceasefire between Israel and Lebanon is a significant development, as it lowers the immediate risk of a wider conflict that could disrupt oil supply. Despite this de-escalation, we’ve seen WTI crude jump to $95.45, suggesting the market is either skeptical the peace will last or is focused on other factors. This contradiction between the news and the price action creates a clear opening for derivative traders in the coming weeks.<\/p>\n
With the CBOE Crude Oil Volatility Index (OVX) recently trading near 32, a level indicating high market uncertainty, we should consider strategies that benefit from a potential price drop if the ceasefire holds. Selling call options with strike prices above $100 could be a viable strategy to collect premium, based on the view that this rally is overdone. This approach would profit if the price falls or even moves sideways as the geopolitical risk premium fades.<\/p>\n
The possibility of a broader US-Iran deal, which this ceasefire makes more plausible, cannot be ignored as a major factor for oil prices. A diplomatic breakthrough could reintroduce over a million barrels of Iranian oil per day to the market, significantly increasing global supply. We saw a similar dynamic back in 2015 when the initial Iran nuclear deal caused a sharp drop in oil prices over the subsequent months.<\/p>\n
However, we must also watch underlying demand and inventory data, which might explain the market’s current strength. This week’s EIA report showed a larger-than-expected draw of nearly 2.5 million barrels, signaling that demand is robust heading into the summer driving season. If these inventory draws continue, it could provide a strong floor for oil prices, even if the geopolitical situation calms down.<\/p>\n
Over the next three weeks, our focus should be on any headlines from the planned talks between US, Israeli, and Lebanese leaders. The weekly API and EIA inventory reports will also be critical for gauging real-time supply and demand fundamentals. We expect heightened price swings around these events, creating short-term trading opportunities for those positioned to react quickly.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Trump says Israel-Lebanon ceasefire extended three weeks; plans talks with Netanyahu and Aoun; WTI jumps 3.8%.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45771","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45771","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45771"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45771\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}