Oil closes above $104 as hopes for end of war fade

Oil drilling rigs

Oil prices rose at the close of trading today, May 11, following comments by US President Donald Trump that the ceasefire agreement with Iran was on the verge of collapse, leaving the Strait of Hormuz closed with no clear end in sight to the conflict.

Brent crude futures for July delivery rose 2.88%, or $2.92, to $104.21 a barrel, after hitting a session high of $105.99.

US West Texas Intermediate (WTI) crude futures for June delivery also rose 2.78%, or $2.65, to $98.07 a barrel.

This came after President Trump rejected Tehran's latest proposal to end the conflict, describing the current ceasefire agreement as "dying."

Analysts at Citibank warned in a note that oil prices could rise further if the two sides fail to reach an agreement to reopen the Strait of Hormuz, despite current high global inventory levels.

A Reuters survey showed that OPEC production fell by 830,000 barrels per day to 20.04 million barrels per day in April, its lowest level since 2000.