Oil falls over $1 on easing geopolitical fears and oversupply worries
USO•Oil prices fell more than $1 a barrel as easing fears of Middle East escalation and concerns about rising OPEC+ output and US inventories weighed on prices. Brent fell 1.58% to $91.29, while WTI slipped 1.43% to $85.29.
1. Prices reverse gains
Brent futures fell $1.47, or 1.58%, to $91.29 a barrel, while US West Texas Intermediate crude futures declined $1.24, or 1.43%, to $85.29. The drops reversed Wednesday’s gains, when Brent rose 1.4% and WTI added 0.6%.
2. Geopolitical concerns ease
A prisoner exchange agreement reached by Russian and Ukrainian negotiators at peace talks in Abu Dhabi eased some concerns about conflict escalation, though US mediators said differences remained on major issues including territory. An analyst said markets were also reacting to expectations of efforts to secure a ceasefire, while uncertainty around the Strait of Hormuz could limit a significant decline.
3. Supply weighs on crude
OPEC+ crude production rose in October, driven by higher Saudi Arabian output despite shipping disruptions through the Strait of Hormuz. US crude stocks increased by 9 million barrels in the latest week, according to figures from the American Petroleum Institute cited by market sources; official US inventory data was due later Thursday.
