Oil prices fell on Thursday as hopes for resumed peace talks outweighed concerns about Middle East supply disruptions. Houthi attacks on Saudi Arabia and Qatari mediation efforts with Iran shaped trading, while expectations of higher Russian output added pressure.
Oil prices fell on Thursday, paring gains made a day earlier, as peace-talk hopes took the edge off concerns about supply disruptions from the escalating regional conflict.
Brent crude futures declined 85 cents, or 0.7%, to $114.47 a barrel by 0720 GMT. US West Texas Intermediate (WTI) crude futures were down $1.13, or 1.1%, at $101.65. On Wednesday, Brent rose 1.3% and WTI gained 3%.
Peace talk hopes pull prices lower
US Vice President JD Vance sought to revive peace negotiations by sending a letter to Iranian Security Council chief Mohsen Rezaei, the Wall Street Journal said, citing US officials and people familiar with the matter. Meanwhile, Qatari mediators have presented Iran with a new draft deal to end the war with the US and Israel, according to an official briefed on the negotiations. However, a senior Iranian official dismissed it as unacceptable ideas that did not amount to an offer.
According to Nomura Securities economist Yuki Takashima: "Selling pressure is prevailing amid expectations that peace talks may resume." He added that the decline remains limited.
Houthi strikes keep supply fears alive
The limited decline was due to concerns over intensified Houthi attacks and fears the US may launch an attack on Iran following its midterm elections set for November 3. The Saudi-led coalition fighting the Houthis said it destroyed a ballistic missile fired toward the kingdom's eastern region early on Thursday.
The Houthis also said they hit Saudi Arabia's biggest oil refinery with a missile. Saudi authorities did not immediately confirm the strike on the 550,000-barrel-per-day facility.
Russian output and US stocks
Some expectations of rising crude and diesel production from Russia also weighed on prices. JPMorgan analysts said there have been no further confirmed attacks on Russian refining infrastructure since the October 15 strike on the Ryazan refinery. As a result, Russian refinery runs rebounded by 350 kbd last week to 4 mbd, according to the analysts.
In the US, energy firms pulled 1.9 million barrels of crude from storage during the week ended October 23, according to the US Energy Information Administration, versus analysts' forecast of a 15,000-barrel build in a Reuters poll. Gasoline stockpiles, however, rose by 3.9 million barrels.
Source: Reuters via Investing.com
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