West Texas Intermediate fell by approximately 3% on Thursday, extending the previous session’s losses of over 1%. The benchmark crude oil’s price is hovering around $60.70 per barrel in European trading.
The decline in crude oil prices comes amid growing concerns over a global supply glut.
Sentiment was further impacted by US President Donald Trump’s remarks on Thursday, stating, “I think we are getting very close to getting a deal with Iran. Iran has agreed to the terms; we want them to succeed. We were losing the Middle East due to the past administration.”
These comments followed Trump’s warning just a day earlier of applying “maximum pressure” on Tehran.
On Wednesday, Washington imposed new sanctions targeting Iran’s domestic ballistic missile production efforts, according to the US Treasury Department. This followed sanctions announced Tuesday on roughly 20 companies involved in a network allegedly facilitating Iranian oil shipments to China.
On the diplomatic front, Iranian official Ali Shamkhani said Wednesday that Tehran is open to signing a nuclear agreement with President Trump.
NBC reported that the proposal includes Iran’s commitment to never develop nuclear weapons in exchange for the immediate lifting of all US sanctions. The prospect of a deal has raised expectations that Iranian oil could soon re-enter markets.
Saudi Arabia also expressed strong support for the US-Iran negotiations, voicing optimism for a favourable outcome.
Adding to supply-side pressures, the US Energy Information Administration (EIA) reported a significant crude inventory build of 3.5 million barrels last week, bringing total stockpiles to 441.8 million barrels. This far exceeded analysts’ expectations for a 1.1 million-barrel draw, according to a Reuters poll. Similarly, API industry data showed a 4.3 million-barrel increase in crude inventories.
Meanwhile, OPEC revised its 2025 forecast for oil supply growth from the US and other non-OPEC+ producers, lowering it to 800,000 barrels per day (bpd) from the previous estimate of 900,000 bpd. Despite this adjustment, the group’s ongoing plans to boost output have continued to weigh on prices.
(Source: OANDA)
