Oil retreated further in Asian hours on Thursday as signs of reduced geopolitical strain combined with U.S. inventory data to sap risk-driven support for crude prices. Traders were also watching for a televised address by U.S. President Donald Trump later in the day about the Iran situation.
As of 20:25 ET (00:25 GMT), Brent futures for June delivery were trading down 1.2% at $99.92 per barrel, while West Texas Intermediate (WTI) crude futures fell 1.7% to $98.40 per barrel. Both contracts had closed modestly lower in the prior session as market participants removed portions of the premium that had accumulated amid concerns over Middle East supply disruptions.
Market participants pared some geopolitical risk after President Trump told reporters on Tuesday that U.S. forces could withdraw from Iran within "two to three weeks," even without reaching a formal agreement. The remark prompted expectations that tensions could ease, reducing one driver of the crude rally that pushed prices to multi-month highs in March. The White House said Trump will deliver a televised speech at 9 p.m. EDT (0100 GMT on Thursday), a development investors were monitoring for further clarity.
Adding to market uncertainty were mixed signals over ceasefire efforts. In a social media post, Trump indicated that Iran's "new regime president" had sought a ceasefire, implying an opening for negotiations. Iran's Foreign Ministry, however, denied that claim, and state media reported on Wednesday that Tehran had not requested a truce. Those conflicting accounts contributed to volatility as traders weighed the prospects for de-escalation against the reality of persistent uncertainty.
On the supply front, official U.S. government data applied additional downward pressure on prices. The Energy Information Administration (EIA) reported a rise in U.S. crude inventories of approximately 5.5 million barrels for the week ended March 27, a build that exceeded expectations for only a modest increase. The larger-than-anticipated stock build contrasted with the earlier risk premium in oil that stemmed from potential disruptions in Middle Eastern supplies.
The combination of easing geopolitical risk sentiment, mixed diplomatic signals, and a heavier U.S. inventory reading left oil markets searching for direction as traders awaited the president's address.
Summary
Oil prices declined in Asian trading after comments from President Trump suggesting a possible U.S. drawdown from Iran within "two to three weeks," together with an EIA report showing a roughly 5.5 million-barrel rise in U.S. crude stocks. Conflicting reports about ceasefire talks in Tehran and the upcoming presidential speech added to market volatility.
Key Points
- Brent fell 1.2% to $99.92/bbl and WTI dropped 1.7% to $98.40/bbl as of 20:25 ET (00:25 GMT).
- President Trump said U.S. forces could leave Iran within "two to three weeks," and will make a televised address at 9 p.m. EDT (0100 GMT on Thursday).
- EIA data showed U.S. crude inventories rose by about 5.5 million barrels in the week ended March 27, surpassing expectations for a modest build.
Risks and Uncertainties
- Conflicting reports on ceasefire discussions between U.S. and Iranian sources — this uncertainty affects energy markets and broader financial market sentiment.
- U.S. crude stock changes that differ from market expectations can quickly alter price direction for oil and influence energy-sector trading.
- Investor reaction to President Trump's televised address could introduce further volatility across commodity and equity markets if it shifts perceptions of geopolitical risk.