Oil Prices Drop as US-Iran Talks Remain Stalled Amid Supply Concerns
Oil prices declined on Thursday as talks between the US and Iran remained stalled, leaving traders uncertain about supply shortfalls. West Texas Intermediate settled around $81 a barrel after rising about 10% over the prior five sessions.
Energy Secretary Chris Wright stated that oil flows averaged 9 million barrels a day over the past week, above several industry estimates. The Energy Information Administration reported a 17.4 million-barrel increase in crude stockpiles last week, potentially offering some near-term relief to prices.
Despite efforts from top producers like Saudi Arabia and the United Arab Emirates to keep exports flowing, crude is headed for a weekly gain as the US-Iran war drags on. The International Energy Agency predicted a shortfall of 1.8 million barrels per day this quarter, more than double an earlier projection.
Francisco Blanch, head of commodities research at Bank of America Global Research, noted that 'I struggle to see how we can come down quickly unless things get better on the geopolitical front.' US President Donald Trump has claimed to have 'total control' over the Strait of Hormuz and is shifting focus to economic pressure.