Oil prices fell by more than $1 per barrel on Thursday as concerns over a supply glut came to the fore
Russia and Ukraine agreed on a comprehensive prisoner exchange during two days of peace talks in Abu Dhabi. Additionally, as fears of an escalating conflict in the Middle East subsided—reducing the risk premium in crude oil markets—an increase in OPEC+ production and a rise in U.S. inventories fueled concerns about a supply surplus.
Brent crude futures fell by $1.47 (1.58%) to $91.29 per barrel as of GMT 04:26. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures dropped by $1.24 (1.43%) to $85.29 per barrel.
These declines reversed the gains recorded on Wednesday, which had followed a drop to two-month lows for both benchmarks the previous day.
Markets are trending downward amid expectations that behind-the-scenes efforts to secure a ceasefire between Russia and Ukraine are continuing, and in the belief that the likelihood of a conflict involving Iran escalating is low—a sentiment reinforced by the anticipation of a U.S.-China summit scheduled for next week. Neverthe less, given the uncertainty surrounding the Strait of Hormuz, a sustained decline in the markets appears unlikely.
Russia and Ukraine have reached an agreement on a comprehensive prisoner exchange during two days of peace talks held in Abu Dhabi. However, disagreements persist on other fundamental issues, including territorial matters.
Meanwhile, Washington has stated that nuclear issues must be included in any initial negotiations with Iran—talks aimed at ending the eight-month-long conflict. Iran, for its part, has declared that it will not allow even a single particle of enriched nuclear material to be removed from the country, and has warned that any new attacks by the U.S. would carry consequences.
Another factor contributing to the downward trend in oil markets is the rise in OPEC+ crude oil production in October, driven by an increase in output from Saudi Arabia, even as shipping disruptions persist in the Strait of Hormuz.
According to data from the American Petroleum Institute (API), U.S. crude oil inventories increased by 9 million barrels last week. Official figures from the U.S. Energy Information Administration (EIA) are expected to be released on Thursday—a one-day delay due to the national holiday on Wednesday.
Related Articles
Oil prices rebound amid concerns over tanker attacks in the Strait of Hormuz
Following the elections in Israel and the US, oil prices keep falling
Brent crude oil experienced its largest percentage decline since April 2020 last week
