Crude benchmarks retreated by more than $1 on Thursday as investors grew hopeful that diplomacy could ease conflicts in the Middle East and Ukraine. Brent futures slipped $1.14, or 1.2%, to $91.62 a barrel by 0141 GMT. US West Texas Intermediate (WTI) crude fell $1.04, or 1.2%, to $85.49.
The decline followed a modest recovery on Wednesday, when Brent rose about 1.4% and WTI gained 0.6%, after both hit two-month lows the previous day.
Peace efforts and Iran tensions shape market mood
Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, a unit of Nissan Securities, said prices were falling on expectations that quiet negotiations were under way to secure a ceasefire between Russia and Ukraine. He added that the Iran war was unlikely to escalate before the US-China summit next week.
Also read: Oil prices fall for fourth day as Iran war escalation risk eases · Ukraine peace talks resume in Abu Dhabi with new flexibility
Kikukawa cautioned that uncertainty around the Strait of Hormuz meant markets were unlikely to suffer a sharp collapse. Russian and Ukrainian negotiators agreed to a major prisoner exchange at two days of talks in Abu Dhabi that ended on Wednesday. US mediators, however, said gaps remained on other major issues, including territory.
Ukrainian President Volodymyr Zelenskiy said Kyiv hoped to achieve concrete results in resolving the war this year. Separately, Iranian security chief Mohsen Rezaei said in televised remarks that no nuclear material would leave Iran and that Washington would face consequences if it launched new strikes.
OPEC+ output and US crude stock figures
OPEC+ crude production rose sharply in October, driven largely by a steep increase in Saudi Arabian output, even as shipments through the Strait of Hormuz continued to be disrupted.
Market sources said US crude stocks rose by 9 million barrels in the latest week, citing American Petroleum Institute data. Official figures from the US Energy Information Administration are due on Thursday, a day later than usual because of a US national holiday on Wednesday.
