TOKYO: Oil prices fell in early Asian trade on Thursday, following a 4% rise the previous day, as investors appreciated efforts by the United States and Iran to defuse tensions as both countries stepped up military activity in key oil-producing regions.
By 0110 GMT, Brent crude futures were down 12 cents, or 0.2%, at $70.23 a barrel, while U.S. West Texas Intermediate (WTI) crude oil was trading down 8 cents, or 0.1%, at $65.11 a barrel.
Both benchmarks rose more than 4% on Wednesday, hitting their highest since January 30, as traders priced in potential supply disruptions due to concerns about the U.S.-Iranian conflict.
Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, a subsidiary of Nissan Securities, said, “Tensions between Washington and the Iranian government remain high, but the prevailing view is that a full-scale armed conflict is unlikely, and we are taking a wait-and-see attitude.”
“U.S. President Donald Trump does not want oil prices to rise sharply, so even if military action does occur, it is likely to be limited to short-term air strikes,” Kikukawa added.
The White House said on Wednesday that there had been some progress in this week’s Iran talks in Geneva, but distance remained on some issues, adding that Tehran was expected to report further details in the coming weeks.
Iran has notified its airmen (NOTAM) that it plans to fire rockets across the south from 0330 GMT to 1330 GMT on Thursday, according to the US Federal Aviation Administration’s website.
At the same time, the United States has deployed warships near Iran, and Vice President J.D. Vance said the United States is considering whether to continue diplomatic relations with Iran or pursue “other options.”
Satellite images show Iran has recently erected a concrete shield and covered it with earth over a new facility at a key military site, working at the site of an alleged Israeli bombing in 2024, experts said.
Meanwhile, two days of peace talks between Ukraine and Russia in Geneva ended on Wednesday without any progress, with Ukrainian President Volodymyr Zelenskiy accusing Russia of delaying U.S. mediation efforts to end the four-year war.
U.S. crude oil, gasoline and distillate inventories fell last week, contrary to expectations in a Reuters poll that crude inventories would rise by 2.1 million barrels in the week ending Feb. 13, market watchers said, citing American Petroleum Institute data on Wednesday.
The official U.S. oil inventory report from the Energy Information Administration is scheduled to be released on Thursday. (Reporting by Yuka Obayashi; Editing by Sonali Paul)
