Oil Prices Fall as Expectations of Iran Surrender Grow

Global oil prices took another hit on Wednesday, extending a multi-day slide, as expectations of President Trump's maximum economic pressure campaign bringing Iran to its knees grew stronger.

The West Texas Intermediate (WTI) crude futures dropped 2.7% to around $80.12 a barrel, while Brent crude fell 2.6% to $86.62 a barrel, representing a notable cooling off from recent geopolitical supply premium spikes.

Markets are pricing in the growing odds that sustained sanctions and diplomatic isolation will force Tehran to the table, potentially restoring more normal flows through the critical chokepoint and removing a major source of upside risk.

In the US, oil producers are pricing a record amount of production, and despite big draws on oil products, a retreat from record high Diesel Crack spreads and the upcoming shoulder season is expected to buy some time for refiners to catch up.