Donna Dong
Research Analyst, Flux
Brent Recovers to $95.01/bbl
Brent slips below $95 as Israel-Lebanon ceasefire eases tensions, while Asia refiners ramp fuel exports.
The Aug’26 Brent futures contract dipped from $96.66/bbl at 11:54 BST to $94.01/bbl at 13:07 BST, before recovering marginally to $95.01/bbl as of the time of writing at 17:06 BST.
In the news, Israel and Lebanon announced late Wednesday that they had agreed to a ceasefire. Iran has made any agreement partly dependent on an end to the fighting between Israel and Hezbollah. Lebanon's Hezbollah leader, Naim Qassem, stated on Thursday that if Lebanese villages continue to be bombed and civilians are killed, northern Israel will remain unsafe. He also described negotiations with Israel as "shameless." In China, beginning 05 Jun, the country will reduce the maximum retail prices for gasoline and diesel for the second time since the Iran conflict began. This conflict has constrained global energy supplies and driven up oil prices worldwide. The National Development and Reform Commission announced on Thursday that the price ceilings for gasoline and diesel will decrease by 525 yuan ($77.52) and 505 yuan/mt, respectively. In the US, supporters of a long-delayed effort to expand nationwide sales of higher-ethanol E15 gasoline are facing a challenging path to pass the measure through a divided Senate, the final major obstacle before it reaches President Donald Trump's desk for approval. Their strategy is to attach the provision to a comprehensive, must-pass bill, while providing sufficient concessions to the refining industry to prevent their opposition. Support originated from Midwestern Republicans and farm-state Democrats eager for increased demand for corn-based ethanol. Meanwhile, fiscal conservatives, refinery-state lawmakers, and some environmental groups opposed it due to concerns about costs, fuel standards, and emissions. In South Korea, refiners have boosted processing rates and jet fuel exports amid recovering crude imports and arbitrage opportunities that drive shipments to the US West Coast. Last month, South Korea exported roughly 8.67 to 9.46mb of jet fuel, marking a significant rebound from March and April, when refiners were unprepared for the Middle East crisis. Finally, at the time of writing, the front-month (Aug/Sep) and 6-month (Aug/Feb) Brent futures spreads are at $2.56/bbl and $11.37/bbl, respectively.
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