Oil Prices Drop Amid Hopes for Middle East Conflict De-escalation - Sarmad

Oil prices fell on Thursday, erasing some of the previous session’s gains as hopes for resumed talks eased renewed concerns about disruptions to Middle East supplies amid escalating regional conflict.

By 0132 GMT, Brent crude futures fell 82 cents, or 0.7%, to $114.50 a barrel. U.S. West Texas Intermediate (WTI) crude futures dropped $1.04, or 1%, to $101.74. In the previous session, Brent crude gained 1.3% and WTI crude rose 3%.

The Wall Street Journal reported on Wednesday, citing U.S. officials and sources, that Vice President JD Vance sought to revive peace negotiations by sending a message to Mohsen Rezaei, secretary of Iran’s Supreme National Security Council.

Yuki Takashima, economist at Nomura Securities, said, “Selling pressure prevails amid expectations that peace talks will resume, but the decline remains limited.”

This is attributed to fears of escalating Houthi attacks and the possibility that the United States would launch an attack on Iran following the midterm elections scheduled for November 3.

The Saudi-led coalition supporting legitimacy in Yemen said it destroyed a ballistic missile launched by the Houthis toward the kingdom’s Eastern Province early on Thursday. Yemeni government forces said the Houthis attacked Aden Airport on Wednesday.

Qatari mediators presented Iran with a draft new agreement to end the war with the United States and Israel, according to an official familiar with the negotiations, but a senior Iranian official rejected it, describing it as unacceptable ideas that do not amount to an offer.

Iranian Foreign Minister Abbas Araghchi said on Wednesday that Tehran continues to give diplomacy a chance to succeed, and pointed to the possibility of completing its seven-day plan in less than two weeks if adopted.

The U.S. Energy Information Administration said on Wednesday that energy companies drew 1.9 million barrels of crude oil from inventories during the week ending October 23, compared with analysts’ expectations of a 15,000-barrel increase in a Reuters poll. However, gasoline stocks rose by 3.9 million barrels, contrary to analysts’ expectations of a 0.9-million-barrel decline.