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EMEA Oil Update: Brent Holds Above $100 as Mixed Signals Come From Middle East

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Brent prices eased on Wednesday, but held firmly above $100 per barrel as market optimism over reported US-Iran diplomatic progress was capped by renewed military threats from Trump.

The Brent futures contract eased 0.4% to $110.89 per barrel. Murban futures closed at $107.35 on May 19 and were not trading by the time of publication of this oil price update.

"The situation in Hormuz is still deadlocked and Trump last night made new threats to attack Iran. If the strait remains closed into June, there is a risk that the oil shortage becomes acute in parts of the world, which could send the oil price significantly higher than today," SEB analysts said.

This structural anxiety was underscored by recent data from the Oxford Institute for Energy Studies, which confirmed a massive restructuring of risk-taking across derivatives markets.

Due to the high volatility and unpredictable physical disruptions in the Middle East, commercial traders are noticeably retreating from standard Brent futures, OIES noted.

Data from the American Petroleum Institute revealed Tuesday that US crude oil inventories dropped by 9.1 million barrels in the week ended May 15.

The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.

According to Saxo Bank, crude continues to trade with an aggressive risk premium driven by the ongoing realities of the conflict.

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