U.S. West Texas Intermediate (WTI) crude futures fell on Thursday as market attention focused on plans for talks between the United States and Iran that are set to take place in Oman on Friday, even though the two sides reportedly differ over the meeting's agenda.
At 2347 GMT, WTI was down 0.7 cents per barrel, or 1%, trading at $64.5 per barrel. Brent crude futures were scheduled to resume trading at 0100 GMT.
Earlier in the week, oil had jumped by roughly 3% after a media report raised the prospect that the planned U.S.-Iran discussions could fall apart. That spike reflected market concern that a breakdown in diplomacy might exacerbate already-elevated tensions in the Middle East.
According to reports, Iran seeks to address its long-running nuclear dispute with Western countries during the talks. The United States, however, has pushed to broaden the agenda to include Iran's ballistic missile program, its backing of armed proxy groups across the region, and its domestic human rights record.
Attempts to dial down tensions have been closely watched as the United States has been increasing its military presence in the Middle East. U.S. President Donald Trump has threatened to strike Iran, an OPEC member, a stance that market participants say could risk a wider confrontation in the oil-rich region.
Market commentary pointed to a cooling of the most acute fears about a collapse in talks as a factor easing prices. "Fears of the bilateral talks' collapse have moderated, leading to easing oil prices," said Tony Sycamore, a market analyst with IG, in a note.
Beyond geopolitics, currency moves added pressure on crude. The dollar index, which measures the U.S. currency against a basket of peers including the yen and the euro, rose 0.25% to 97.65. A stronger dollar makes dollar-denominated crude more expensive for holders of other currencies, which can reduce foreign demand.
Market context:
- Immediate tug-of-war between a potential diplomatic thaw and persistent security concerns in the Middle East.
- Exchange-rate dynamics contributing to downward pressure on global crude demand.