Crude oil futures fell as signs of a thaw in US relations with sanctioned oil producers Iran and Venezuela undermined expectations of tightening global supply.
West Texas Intermediate fell below $79 to the lowest closing price in more than a month. The Biden administration is in talks with Venezuela to explore easing sanctions that have hampered its oil sales if the country holds cleaner elections. Meanwhile, Iran’s observed exports rose this month as backdoor diplomatic efforts with the US appear to be easing pressure on the Middle Eastern nation.
Capping crude’s losses was a bullish inventory report that showed supplies remain tight despite concerns about a possible slowdown in demand. US inventories fell to the lowest level since December 2022, while stocks at the nation’s largest storage center in Cushing, Oklahoma, fell the most since October 2021.
Crude oil’s rally since late June has faltered in recent sessions amid a worsening outlook in China, signaling the Federal Reserve is not yet done with its monetary tightening campaign. Evidence of an accelerating downturn in the euro zone added to broader concerns about economic growth on Wednesday.
Macro headwinds have overshadowed a tougher market following supply cuts by OPEC+ chiefs Saudi Arabia and Russia. Meanwhile, Turkey and Iraq have held a series of talks as they seek to restart a major oil pipeline, although no progress has been made so far.
Prices:
- WTI for October delivery fell 75 cents to settle at $78.89 a barrel in New York.
- Brent for October settlement fell 82 cents to settle at $83.21.
