Oil prices decreased for the first time in six days after US President Donald Trump indicated he might delay a military strike against Iran for the moment.
Brent crude oil fell by as much as 3.1%, dropping below $65 per barrel after rising around 11% in the previous week, while West Texas Intermediate hovered near $60.
Trump mentioned he had received assurances that Iran would cease its actions against protesters, which diminished the chances of an immediate US military intervention concerning the protests against Supreme Leader Ayatollah Ali Khamenei's regime and potential disruptions to Iranian oil production and vital shipping routes.
The situation in Iran, however, remained unstable. Authorities temporarily shut down the airspace surrounding Tehran, while the US moved some personnel back to Qatar and other American military installations in the area.
Oil prices increased in the new year due to the chaos in OPEC's fourth largest producer and turmoil in Venezuela, which added a premium to prices after five consecutive months of losses triggered by expectations of an oversupply.
Trump mentioned having a “very good call” with acting Venezuelan President Delcy Rodriguez on Wednesday, discussing topics that included oil.
In a separate statement, the US president expressed to Reuters that he thinks it would be advantageous for Venezuela to stay in OPEC, although he was uncertain whether this would ultimately benefit the US, noting that Washington had not talked about this with Caracas.
"It appears that geopolitical factors will likely maintain upward pressure on Brent prices, and a rise to $75 is definitely a possibility," remarked Robert Rennie, who heads commodity research at Westpac Banking Corp.
According to him, the surge might be followed by a downturn once the “all clear” signal is given or the regime led by Khamenei falls, akin to market fluctuations observed during the Iran-Israel conflict in June.
In other news, US government statistics indicated that crude oil reserves increased by 3.4 million barrels last week, marking the most significant rise since early November.
The growing stockpiles, an influx of Venezuelan oil to the US, along with a disruption at a major terminal in the Black Sea, has caused WTI to approach its largest discount in 15 months compared to Brent.
