Oil prices fall as peace hopes offset fears of growing Middle East conflict

Oil prices slipped on Thursday, erasing previous gains as optimism for peace talks tempered fears of heightened Middle Eastern conflict. Brent crude futures slipped 82 cents, or 0.7 percent, to $114.50 a barrel, while US West Texas Intermediate (WTI) crude futures fell $1.04, or 1.0 percent, to $101.74. Brent had risen 1.3 percent and WTI gained 3 percent on Wednesday.

US Vice President Joseph R. Biden Jr. attempted to restart talks by sending a letter to Iranian Security Council chief Mohsen Rezaei, according to the Wall Street Journal.

Selling pressure mounted as traders anticipated potential peace negotiations, said Yuki Takashima, an economist at Nomura Securities. However, the decline was contained due to concerns over Houthi attacks and the possibility of a US strike on Iran following its mid-term elections on November 3. The Saudi-led coalition reported destroying a Houthi-fired ballistic missile near Saudi Arabia's eastern region.

Meanwhile, Houthi forces attacked Aden airport and claimed to have hit Saudi Arabia's largest oil refinery with a missile, intensifying strikes against the world's second-largest crude producer. Qatar presented Iran with a new draft deal to end the war, but an Iranian official rejected it as unacceptable. Iran's foreign minister stated Tehran would consider completing its seven-day plan in under a week if diplomatic efforts succeeded.

The US Energy Information Administration reported that energy firms withdrew 1.9 million barrels of crude from storage during the week ending October 23, exceeding expectations for a 15,000-barrel build. However, gasoline inventories rose by 3.9 million barrels, surpassing forecasts for a 0.9 million barrel draw.