WTI Price Analysis: Middle East war de-escalation restricts oil rally around $103.40

The oil price corrects further to near $96.60 as Middle East ceasefire hopes intensify.
Iran is ready to end the war if the US guarantees no repetitive aggression.
The UAE calls for forced Hormuz reopening, ready to join the US and allies.

West Texas Intermediate (WTI), futures on NYMEX, is down 0.8% to near $96.60 in the early European trade on Wednesday. The oil price extends its correction from the three-week high of 103.33 posted on Tuesday on hopes of a ceasefire in the Middle East war.

The expectation of peace in the Middle East has intensified, following comments from both the United States (US) and Iran that they are ready to end the war.

According to the Iranian state news agency, Iran’s President Masoud Pezeshkian told European Union (EU) Council President António Costa on Tuesday that his country is ready to end the war with the US, but it needs certain guarantees of no repetitive aggression. This is the first time that Iran has discussed peace in the Middle East and not extending attacks on Gulf nations.

Meanwhile, the oil price retracement could prove to be short-lived as the Strait of Hormuz, a passage to almost 20% of global energy supply, is expected to remain covered under Iran’s military influence.

Earlier in the day, the United Arab Emirates (UAE) expressed willingness to join the US and other allies in the forceful reopening of the Hormuz, the Wall Street Journal (WSJ) reported.