Oil Prices Rebound Amid Potential US Response to Jordan Incident

Oil prices have rebounded following their largest drop in three weeks on Wednesday. The market is carefully considering the implications of a potential US retaliation following a fatal attack in Jordan and balancing these concerns with indications of a strong supply of oil from the United States.

Market Reaction to Geopolitical Tensions

Investors are closely monitoring the situation after a lethal attack against US forces in Jordan raised the possibility of American reprisal. Concerns have risen as President Joe Biden indicated that a decision on how to respond had been made, following reports that Iran supplied the weapons used in the attack, an accusation Iran denies.

US Oil Supply Influence on Prices

In contrast to the geopolitical tensions, the market is also weighing the continuing signs of robust American oil production. Recent data highlight an increase in US crude inventories, with oil output in the country reaching new highs. This growth in supply has been applying downward pressure on oil prices.

Oil's Path Forward

Despite the turmoil, oil ended the month with its first gain in four months, partly due to Houthi rebel attacks on commercial shipping in the Red Sea. However, oil prices are being capped by a strong supply from non-OPEC producers and mixed signals regarding demand from significant consumers.

oil, market, geopolitical