Oil prices experienced a decline of approximately $2 on Thursday, driven by expectations of a possible U.S.-Iran nuclear deal that could lead to the easing of sanctions. Additionally, an unexpected increase in U.S. crude oil inventories last week has heightened investor concerns regarding oversupply.
Brent crude futures dropped by $2.16, or 3.3%, reaching $63.93 per barrel by 0657 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures fell by $2.10, or 3.3%, settling at $61.05. Both benchmarks had already lost around 0.8% the previous day.
An Iranian official informed NBC News that Iran is open to agreeing on a deal with the U.S. in exchange for the removal of economic sanctions. Saudi Arabia’s foreign minister expressed full support for the U.S.-Iran nuclear discussions, hoping for positive outcomes.
Despite these developments, Washington imposed sanctions targeting Iranian efforts to manufacture ballistic missile components domestically. These sanctions followed earlier measures against a network allegedly sending Iranian oil to China. The actions came after the fourth round of U.S.-Iran talks in Oman focused on resolving disputes over Iran’s nuclear program.
Analysts noted that the unexpected rise in U.S. inventories and profit-taking after crude oil rebounded towards its recent $55-65 per barrel range are also affecting prices. Data from the Energy Information Administration revealed crude stockpiles increased by 3.5 million barrels to 441.8 million barrels in the week ended May 9, contrary to analysts’ expectations for a 1.1 million-barrel draw. Industry data also indicated a significant build of 4.3 million barrels in crude stocks last week.
The Organization of the Petroleum Exporting Countries (OPEC) and allied producers, known as OPEC+, have been increasing supply, although OPEC recently trimmed its forecast for growth in oil supply from the U.S. and other producers outside the OPEC+ group this year.
— new from Reuters