Oil Prices fall as Iran and Ukraine peace hopes grow
Key points
- Brent crude fell more than US$1 per barrel in Asian trading, with West Texas Intermediate also declining as hopes for peace talks involving Iran and Ukraine weighed on oil markets.
- Brent crude traded at US$91.32 per barrel, while WTI stood at US$85.32 at the time of writing.
- Higher OPEC+ production and a reported 9-million-barrel increase in US crude inventories added pressure, although tanker attacks in the Strait of Hormuz limited losses.
Brent crude and West Texas Intermediate fell more than US$1 per barrel in Asian trading on Thursday as hopes for peace talks involving Iran and Ukraine pressured oil prices.
At the time of writing, Brent traded at US$91.32 per barrel and WTI at US$85.32, reversing Wednesday's gains of approximately 1.4% and 0.6%, respectively.
"Markets are falling on expectations that behind-the-scenes efforts are underway to secure a ceasefire between Russia and Ukraine and that it is unlikely the Iran war will escalate ahead of the US-China summit next week," said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.
Russian and Ukrainian negotiators agreed to a prisoner exchange after two days of talks in Abu Dhabi, although disagreements over territorial issues remained unresolved.
Iran's Supreme National Security Council chief Mohsen Rezaei said the country would not surrender its existing enriched uranium and warned of retaliation if the United States launched further strikes.
Additional pressure came from higher OPEC+ oil production in October and an American Petroleum Institute estimate showing US crude inventories increased by 9 million barrels, with official Energy Information Administration figures due Thursday.
Continued attacks on tankers in the Strait of Hormuz limited some losses, while ING commodity strategists said uncertainty surrounding the US-Iran conflict continued to support oil prices.
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