Crude slides toward $93, WTI drops to $87 as Trump rules out immediate Iran strikes

Crude oil prices continued their downward trend on Thursday, falling toward $93 as US President Donald Trump ruled out immediate military strikes on Iran. Brent crude futures fell to $93.63 a barrel, while WTI futures dropped to $87.13, both marking a 1% decline. Murban physical crude also saw a slight reduction, falling by $1.27 or 1.24% to $100.90. This follows a significant decline earlier in the week, with Brent dropping nearly 8% on Wednesday and trading below $100 for the first time since early October.

The drop in oil prices coincided with the Democrats' victory in the US midterm elections, with Vice President Mike Pence attributing the Republican losses to the Iran war. The markets anticipated that Trump might shift towards diplomacy, following Qatar's increased mediation efforts, and Trump's statement that the US has no immediate plans to strike Iran, easing concerns of further escalation.

However, caution remained, as Iranian officials indicated that the two sides were still far from an agreement. US officials also informed Axios that the military was completing preparations for possible major combat. The Hormuz disruption continues to pose a physical constraint, and prices staying below $100 are still significantly higher than pre-February levels.

Murban's premium of roughly $7 over Brent futures suggests that physical Gulf barrels remain tighter than the paper market. Despite the Hormuz tensions, Brent crude oil prices surged past $102 due to Iran-related tensions and the potential for conflict.