Oil prices fell nearly 1% on Thursday as a recovery in crude exports from the Gulf and an unexpected increase in U.S. inventories eased supply concerns, while investors assessed the latest diplomatic efforts between the United States and Iran to end the conflict in the Middle East.
Both benchmarks pare losses
Brent crude futures fell 1.1% to $96.92 a barrel in early trading before paring losses to trade at $97.16. U.S. West Texas Intermediate crude fell 1.4% to $89.18 a barrel before paring losses.
The two benchmarks had risen by about $1 a barrel on Wednesday. Brent posted monthly gains of around 14% in September, its biggest increase since July, while West Texas Intermediate posted monthly gains of about 5%.
The near-term outlook for oil remains negative, while the recovery in shipments from the Gulf, the resumption of Saudi exports through Yanbu and the increase in U.S. inventories are easing supply concerns
Inventories and exports ease supply concerns
Saudi Arabia resumed loading oil onto tankers from Yanbu after the East-West pipeline was restarted. Goldman Sachs estimated in a note on Tuesday that oil exports from Gulf countries, including exports on tankers sailing with their transponders switched off, had recovered to 23.3 million barrels per day last week, in line with the 2025 average, with exports doubling in September.
The U.S. Energy Information Administration said crude inventories rose by 922,000 barrels to 427.3 million barrels in the week ended September 25, compared with analysts' expectations for a decline of 264,000 barrels.
Markets await diplomatic developments and OPEC+ decision
“The resumption of diplomatic contact between the United States and Iran could reduce the geopolitical risk premium, but significant progress remains uncertain,” Sachdeva said.
Iran said on Wednesday that it had received a U.S. response to its latest proposals to revive a ceasefire agreement in the Gulf region. U.S. President Donald Trump denied reports based on comments by U.S. officials that he was prepared to ease sanctions on Iran and release frozen Iranian funds in exchange for “concrete” steps by Tehran on its nuclear program.
Two sources familiar with the matter said the OPEC+ alliance was likely to keep oil production targets unchanged for November at its meeting on Sunday.
