WASHINGTON (dpa-AFX) - Partly offsetting the surge seen over the two previous sessions, crude oil prices plunged on Thursday after traders opted to book profits. In addition, upcoming U.S.-Iran talks and ongoing Russia-Ukraine negotiations pulled down prices, while weak U.S. jobs data increased demand concerns.
WTI Crude Oil for March delivery was last seen trading down by $1.87 (or 2.87%) at $63.27 per barrel.
Weeks ago, U.S. President Donald Trump threatened Iran to strike a deal with the U.S. after discussing its nuclear plans or face damaging attacks. Prior to his warning, an armada of U.S. naval forces headed to Iran and closed in, waiting to strike.
Initially, Iran remained defiant but later agreed to negotiate with the U.S. in Muscat, Oman.
After the U.S. insisted that the talks also should include Iran's program on ballistic missiles, Iran retreated as it wanted to confine the discussion only regarding its nuclear program. The talks were about to be abandoned.
Later, persuaded by the Arab and Muslim nations, the U.S. agreed to continue as planned.
The news took the geopolitical risk premium off the table and weighed on oil prices.
In talks over the U.S.-authored proposal to end the Russia-Ukraine war, negotiators from Russia and Ukraine met in Abu Dhabi, United Arab Emirates, yesterday and today.
The second-day talks ended with both nations agreeing to exchange 314 prisoners of war.
While Russia's chief negotiator Kirill Dmitriev remarked that there had been 'progressive' movement, Ukraine's chief negotiator Rustem Umerov observed that the talks had been 'meaningful and productive.'
On Tuesday, an American Petroleum Institute report revealed that crude oil inventories fell by 11.1 million barrels last week.
Wednesday's data from the U.S. Energy Information Administration said that crude oil inventories decreased by around 3.5 million barrels for the week ending January 30.
Recent surveys showed that the Organization of Petroleum Exporting Countries (OPEC) pumped an average of 28.83 million barrels per day, marking a decline of 230,000 bpd from the previous month.
This drop follows the blockade on Venezuela's oil exports after the U.S.-led military intervention in Venezuela, which displaced its President Nicolas Maduro, with the U.S. taking total control of the nation's rich oil reserves.
OPEC has already reaffirmed its commitment to pause production hikes for the first-quarter 2026.
Recently, the U.S. and India signed a trade deal immediately after which Trump announced reducing tariffs on India to 18%, while India has committed to expand its U.S. oil and gas purchases and stop buying from Russia.
However, Russia announced that it sees no danger for its oil exports due to the trade deal, observing that both oils are substantially different and U.S. oil cannot substitute Russian supplies.
The partial U.S. government shutdown that began last Friday ended yesterday after Trump signed a bill passed by both houses of Congress, resulting in some support to the U.S. dollar .
Crude also suffered some loss due to the appreciation in the greenback.
The U.S. dollar index was last seen trading at 97.81, up by 0.20 points (or 0.20%) today.
The U.S. Labor Department's data on initial jobless claims revealed a rise by 22,000 from the previous week to 231,000 in the last week of January. The increase exceeded market expectations of 212,000 and marks the largest number of initial claims in nearly two months.
Continuing jobless claims increased to 1,844,000 for the week ending January 24 from 1,819,000 of the previous period, slightly below expectations of 1,850,000.
The weaker-than-expected labor market news indicated negative energy demand.
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