Oil falls as diplomacy hopes outweigh Middle East escalation fears
USO•Brent fell 1.1% to $114.05 a barrel and U.S. WTI dropped 1.5% to $101.27 as hopes for peace talks weighed on prices. U.S. crude inventories fell 1.9 million barrels, while gasoline stocks rose 3.9 million barrels.
1. Prices retreat
Oil prices fell on Thursday, paring gains from the previous day as hopes for peace talks eased concerns about Middle East supply disruptions. Brent crude futures declined $1.27 to $114.05 a barrel, while U.S. West Texas Intermediate futures fell $1.51 to $101.27. Brent had risen 1.3% and WTI 3% on Wednesday.
2. Diplomacy and conflict
The Wall Street Journal reported that U.S. Vice President JD Vance sent a letter to Iranian Security Council chief Mohsen Rezaei seeking to revive peace negotiations. Qatari mediators presented Iran with a new draft deal to end the war with the U.S. and Israel, but a senior Iranian official dismissed it as unacceptable. Iran's foreign minister said Tehran continued to give diplomacy a chance. Attacks and threats in the region, including a Houthi missile destroyed by the Saudi-led coalition and reported tanker incidents near the Strait of Hormuz, limited the oil-price decline.
3. Inventories and production
The U.S. Energy Information Administration said crude stocks fell 1.9 million barrels in the week ended October 23, compared with analysts' forecast for a 15,000-barrel build. Gasoline stocks rose 3.9 million barrels, while analysts had expected a 900,000-barrel draw. JPMorgan analysts said Russian refinery runs rebounded by 350,000 barrels a day last week to 4 million barrels a day.
