Brent trails below $100/bbl mark

The front-month ICE Brent contract has declined by $4.11/bbl on the day, to trade at $99.18/bbl at 09.00 GMT.

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Upward pressure:

Brent futures gained some support after the US Energy Information Administration (EIA) reported a decline in US crude stocks.

Commercial US crude oil inventories decreased by 2.3 million bbls to 457.2 million bbls in the week ending 1 May, according to data from the EIA.

“The modest draw [reported by the EIA] reflected a sharp fall in exports,” two analysts from ING Bank noted.

Yesterday, the American Petroleum Institute (API) also reported a sizeable decline of 8.1 million bbls in US crude stocks.

A decline in US crude stocks typically indicates improvement in demand for oil and can put some upward pressure on Brent's price.

Downward pressure:

Brent crude’s price has plunged on renewed hopes of a ceasefire deal between Washington and Tehran.

Iran is considering a new US proposal to end the conflict in the Middle East, the BBC reported.

“Energy markets sold off sharply… on de-escalation hopes in the Middle East,” ING Bank’s analysts said.

The news has raised hopes that oil flows through the Strait of Hormuz can gradually resume, according to market analysts.

The US proposal is “understood to include a one-page memorandum that would, if accepted by Iran, lead to a gradual reopening of Hormuz and the lifting of US restrictions on access to Iranian ports,” ING Bank’s analysts added.

By Aparupa Mazumder

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