Oil prices slipped in Asian trading Thursday after jumping nearly 4% the previous session, as traders weighed renewed U.S.-Iran tension against signs diplomatic efforts to end the conflict remained possible. Rising Gulf supply and a bigger-than-expected U.S. crude inventory build added further pressure.
Prices retreat after Wednesday's rally
Brent Oil Futures expiring in November fell 1% to $102.10 per barrel as of 20:32 ET (00:32 GMT). West Texas Intermediate crude futures also slipped 0.7% to $91.50 per barrel over the same window. Brent had settled nearly 4% higher on Wednesday, while WTI climbed nearly 2% that same session.
The rally followed Iranian President Masoud Pezeshkian's address to the United Nations General Assembly, where he said Iran would not surrender to U.S. pressure while maintaining that Tehran remained open to diplomacy. His comments came a day after President Donald Trump warned he could "annihilate" Iran if a deal to end the conflict could not be reached.
Hormuz talks continue
A senior Iranian official told Reuters that Tehran was reviewing Washington's response to an Iranian proposal to end hostilities, though significant differences remained. Indirect discussions have included the possible reopening of the Strait of Hormuz and the lifting of a U.S. naval blockade on Iran.
The strait normally handles roughly one-fifth of global oil and gas shipments, but Iranian security chief Mohsen Rezaei said Wednesday it would not reopen until Tehran's conditions were met. At the same time, improving Gulf supply has limited oil's upside: Saudi Arabia has restarted operations on its East-West pipeline to the Red Sea, while Iraq has increased exports and expects to raise shipments through Turkey.
Diesel report and inventory data weigh on sentiment
U.S. diesel drew separate attention after a report that the White House was considering a 90-day ban on diesel exports sent ultra-low-sulfur diesel futures sharply lower on Wednesday. The White House later called the report inaccurate. U.S. crude inventories rose by 3 million barrels to 426.4 million barrels in the week ended Sept. 18, according to the Energy Information Administration, compared with analysts' expectations for a 640,000-barrel draw.
Gasoline inventories fell 1.7 million barrels, while distillate inventories, which include diesel and heating oil, declined 400,000 barrels.
Source: Investing.com
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