BEIJING/SINGAPORE, May 21 - Oil prices edged up on Thursday as investors monitored US-Iran peace talks, while supply tightness and US inventory drawdowns provided support.
Brent crude rose 78 cents (0.74%) to $105.80 a barrel, while US WTI crude gained 84 cents (0.85%) to $99.10.
Both benchmarks dropped over 5.6% on Wednesday after President Trump said talks with Iran were in final stages, but threatened further attacks if no deal.
ING analysts noted: "The oil market remains overly sensitive to Iran headlines. Participants hope talks are progressing." They forecast Brent averaging $104 this quarter.
Iran announced steps to control the Strait of Hormuz, which previously carried about 20% of global consumption but has been mostly closed since February 28.
The US Energy Information Administration reported a record drawdown of nearly 10 million barrels from the Strategic Petroleum Reserve last week.
"The drawdown in inventories will make it difficult for oil prices to remain low," said Mingyu Gao, chief researcher at China Futures. "With Hormuz blocked, global inventories could fall to five-year lows by late June."
