US Crude Inventories Surge, Weighing on Oil Prices Amid US-Iran Talks
Oil prices dropped by more than 1% on Thursday after the US reported its biggest jump in crude inventories in three years. The US Energy Information Administration data showed that stockpiles rose by 16 million barrels last week, weighing on oil prices.
The Brent crude futures contract was down $1.05, or 1.5%, at $69.80 a barrel by 1235 GMT. WTI futures lost $1.26, or 1.9%, to $64.16. UBS analyst Giovanni Staunovo pointed out that weakness in the North Sea physical oil market was also contributing to the decline.
The ongoing US-Iran nuclear talks are a key factor for traders assessing supply implications. The third round of talks between US envoy Steve Witkoff and Jared Kushner, and an Iranian delegation in Geneva on Thursday, will be closely watched. If a constructive resolution is reached, it could lead to a gradual unwinding of the $10 per barrel risk premium currently priced in.
Meanwhile, Saudi Arabia is boosting oil production and exports as part of a contingency plan in case of any US strike on Iran disrupting supplies from the Middle East. OPEC+ is also considering raising oil output by 137,000 barrels per day in April to meet peak summer demand.