The price of Brent crude oil futures fell by $1.22, equivalent to 1.1%, to $114.10 per barrel. West Texas Intermediate crude oil also dropped by $1.33, equivalent to 1.3%, trading at $101.45 per barrel.
Hopes for Peace Talks and Their Impact on the Oil Market
While Brent oil prices increased by 1.3% and U.S. oil by 3% on Wednesday, hopes for negotiations between Iran and the U.S. have emerged as a pressure factor on oil prices. The Wall Street Journal reported that J.D. Vance, the U.S. Vice President, sent a letter to Mohsen Rezaei, a senior Iranian security official, to revive peace talks.
Other Pressures on Oil Prices
Yuki Takashima, an economist at Nomura Securities, stated that expectations regarding the potential resumption of peace talks have created selling pressure in the market. However, concerns about escalating attacks by Yemen's Houthis and the possibility of a U.S. attack on Iran after the midterm elections on November 3 continue to prevent further declines in oil prices.
The Saudi-led coalition, engaged with the Houthis in Yemen, announced that it intercepted a ballistic missile fired by this group towards the eastern region of Saudi Arabia early Thursday. Additionally, the Houthis' attack on Aden airport occurred a day after their claim of targeting a major Saudi oil refinery, which has a daily refining capacity of about 550,000 barrels of oil.
Furthermore, analysts at J.P. Morgan noted an increase in Russian crude oil and diesel production, suggesting that Russian crude oil production could rise to 8.4 million barrels per day.
According to data from the U.S. Energy Information Administration, crude oil inventories in the country decreased by 1.9 million barrels in the week ending October 23, while gasoline inventories increased by 3.9 million barrels. The oil market is currently caught between two opposing forces: hopes for diplomatic progress and the potential increase in Russian supply on one side, and ongoing conflicts and the risk of disruption to Middle Eastern energy infrastructure on the other.
