Oil prices fell on Thursday after gaining about 4 percent in the previous session, as Iran signalled that it remained open to diplomatic efforts to end its war with the United States, although the two sides continue to disagree over the terms of any agreement.
Brent crude futures were down 92 cents, or 0.9 percent, at $102.16 a barrel at 7:00 a.m. Saudi time. US West Texas Intermediate futures declined 77 cents, or 0.8 percent, to $91.39 a barrel.
Iran and the United States remain divided over how to end the conflict, but diplomacy must continue, a senior Iranian official told Reuters on Wednesday. The comments came after Iranian President Masoud Pezeshkian told the UN General Assembly that Tehran would not surrender to US pressure.
The Iranian official said Tehran was examining Washington’s response to its proposals for peace. The proposals include lifting a US naval blockade on Iranian ports and reopening the Strait of Hormuz, a major route for global oil shipments.
“Oil is falling because the market is unwinding part of its geopolitical risk premium as Gulf supply recovers and hopes of a US-Iran diplomatic breakthrough grow,” said Priyanka Sachdeva, head of market insights at Phillip Nova.
She said Brent crude continued to carry a larger geopolitical and sea-route premium because international oil supplies are more directly exposed to disruptions in the Middle East and around Hormuz. WTI, meanwhile, benefits from US oil production being relatively insulated from those risks.
The outlook for the Strait of Hormuz remained uncertain. Iran’s security chief Mohsen Rezaei said on Wednesday that the waterway would not be reopened until Iran’s conditions were met.
US Secretary of State Marco Rubio said negotiations with Iran would require sustained efforts. He also said President Donald Trump retained military options.
Oil traders were also monitoring developments involving US diesel exports. Ultra-low-sulfur diesel futures fell about 5 percent in midday trading after Politico reported that the Trump administration was considering a 90-day ban on diesel exports. The White House denied the report.
US Energy Secretary Chris Wright said such a ban would not work, despite Trump’s support for the idea. Analysts have also warned that restricting exports could do little to lower domestic energy prices while tightening global supplies.
US distillate inventories, which include diesel and heating oil, fell by 428,000 barrels last week to 107.4 million barrels, according to Energy Information Administration data.
US crude inventories moved in the opposite direction, rising by 3 million barrels to 426.4 million barrels. Analysts surveyed by Reuters had expected a decline of 641,000 barrels.
Facebook
Twitter
Instagram
LinkedIn
RSS