Oil prices drop more than $1 as hopes for Iran, Ukraine peace talks pressure markets

Oil prices plummeted over $1 on Thursday, Nov 12, as optimistic expectations of peace talks between Iran and Ukraine weighed on the market, Reuters reported. Brent futures fell by $1.14, or 1.2%, to $91.62 a barrel, while US West Texas Intermediate (WTI) crude futures slipped by $1.04, or 1.2%, to $85.49. The decline came as markets anticipated the potential for a ceasefire between Russia and Ukraine and the unlikely escalation of the Iran war before the upcoming US-China summit.

Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, noted that while the uncertainty surrounding the Strait of Hormuz would likely prevent a significant market collapse, expectations of progress in the talks had put downward pressure on prices. However, disagreements remained among Ukrainian President Volodymyr Zelenskiy and Russian and Ukrainian negotiators, who agreed to a major prisoner exchange but still had issues to resolve, including territorial disputes.

Meanwhile, Iran's security chief, Mohsen Rezaei, vowed that the country would not allow any enriched nuclear material to leave its borders, threatening consequences if the US launched new strikes. OPEC+ crude oil production increased in October, driven by Saudi Arabia's output surge, despite continued disruptions to shipments through the Strait of Hormuz.

US crude stocks rose by 9 million barrels in the latest week, according to data from the American Petroleum Institute, though official figures from the US Energy Information Administration are expected on Thursday, delayed due to the US national holiday on Wednesday.