Oil prices lost nearly $1 in early trade on Thursday on expectations of a potential US-Iran nuclear deal, while an unexpected build in US crude oil inventories last week heightened investor concerns about oversupply.
Brent crude futures fell 88 cents, or 1.3 per cent, to $65.21 a barrel by 0055 GMT. US West Texas Intermediate (WTI) crude futures slid 92 cents, or 1.5 per cent, to $62.23.
The both benchmarks lost about 0.8 per cent on Wednesday.
Iran is willing to agree to a deal with the US in exchange for the lifting of economic sanctions, an Iranian official told NBC News in an interview published on Wednesday.
‘Fresh selling was triggered by expectations that a US-Iran nuclear deal would ease recently tightened US sanctions on Iran, potentially loosening the global crude supply-demand balance,’ said Yuki Takashima, economist at Nomura Securities.
Saudi Arabia fully supports the US-Iran nuclear talks and hopes for positive results, the kingdom’s foreign minister Prince Faisal bin Farhan Al-Saud said on Wednesday.
Washington issued sanctions on Wednesday to target Iranian efforts to domestically manufacture components for ballistic missiles, the US Treasury Department said, following Tuesday’s sanctions on some 20 companies in a network that it said has long sent Iranian oil to China.
The sanctions came following a fourth round of US-Iran talks in Oman aimed at addressing disputes over Iran’s nuclear programme.
The Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, has been increasing supply, although OPEC on Wednesday trimmed its forecast for growth in oil supply from the United States and other producers outside the wider OPEC+ group this year.
Meanwhile, data from the Energy Information Administration showed crude stockpiles rose by 3.5 million barrels to 441.8 million barrels in the week ended May 9, compared with analysts’ expectations in a Reuters poll for a 1.1 million-barrel draw.
API industry data also showed a large build of 4.3 million barrels in crude stocks last week, market sources said on Tuesday.
