Oil Prices: Crude Falls More Than 1% on Hopes for Middle East and Ukraine Peace Talks

TOKYO: Oil prices fell by more than $1 a barrel on Thursday as hopes for progress in peace negotiations involving the Middle East and the Russia-Ukraine war weighed on market sentiment.

Brent crude futures declined $1.14, or 1.2 per cent, to $91.62 a barrel by 0141 GMT, while US West Texas Intermediate (WTI) crude futures dropped $1.04, or 1.2 per cent, to $85.49.

Both benchmarks had gained on Wednesday, with Brent rising around 1.4 per cent and WTI advancing 0.6 per cent after hitting two-month lows a day earlier.

Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, a unit of Nissan Securities, said oil markets were declining amid expectations that behind-the-scenes diplomatic efforts could secure a ceasefire between Russia and Ukraine. He added that investors also appeared to believe the Iran conflict was unlikely to escalate ahead of next week’s US-China summit.

However, Kikukawa cautioned that uncertainty surrounding the Strait of Hormuz could prevent a significant decline in oil prices.

Russian and Ukrainian negotiators agreed to a major prisoner exchange during two days of peace talks in Abu Dhabi that concluded on Wednesday. US mediators said differences remained over several key issues, including territorial matters.

Ukrainian President Volodymyr Zelenskiy said Kyiv hoped to achieve concrete progress towards resolving the war this year.

Meanwhile, Iran’s security chief Mohsen Rezaei said the country would not allow any enriched nuclear material to leave its territory and warned of consequences if the United States launched further strikes.

Karachi Development: Senator Says City Is Key to Achieving PKR 1 Trillion Economy Target

Washington has maintained that nuclear issues must be included in initial negotiations aimed at ending the eight-month-old conflict with Iran. However, US officials have played down the need for additional military action.

On the supply side, OPEC+ crude oil production increased sharply in October, led by higher output from Saudi Arabia, despite continued disruptions to shipments through the Strait of Hormuz.

Separately, US crude inventories rose by 9 million barrels in the latest week, according to market sources citing data from the American Petroleum Institute (API).

The US Energy Information Administration (EIA) was scheduled to release its official inventory figures on Thursday. The report had been delayed by a day because of a US national holiday on Wednesday.