A resolution of the Mideast conflict could return the market to surplus conditions, while a prolonged disruption would eventually lead to demand destruction.

US assertions that a peace deal is imminent and growing evidence of oil market resilience to the Mideast supply shock are exerting downward pressure on prices.

Global oil inventories are being depleted at a record pace, as governments draw down strategic reserves and stored crude to offset lost supply, while U.S. fuel stocks have fallen…