Oil prices eased about 1% in volatile trade on Thursday on reports the U.S. and Israel will try to restart talks on a possible ceasefire in Gaza.
Brent futures settled 58 cents, or 0.8%, lower at $74.38 a barrel, while U.S. West Texas Intermediate crude (WTI) slipped 58 cents, or 0.8%, to end at $70.19.
Earlier in the session, both benchmarks traded up over $1 a barrel on concerns the ongoing conflict in the Middle East could result in oil supply disruptions and from uncertainty ahead of the U.S. presidential election on Nov. 5.
“(The) energy complex continues to zig and zag as Middle East risk premium expands and contracts almost daily,” analysts at energy advisory firm Ritterbusch and Associates said in a note.
After Iran fired missiles at Israel on Oct. 1, Brent crude surged about 8% during the week ended Oct. 4 on worries Israel would attack Iran’s oil infrastructure. It fell about 8% in the week ended Oct. 18 on reports Israel would not hit energy infrastructure, easing fears of supply disruptions.
Iran is a member of the Organization of the Petroleum Exporting Countries and produced about 4 million barrels per day (bpd) of oil in 2023, U.S. Energy Information Administration data showed.
Iran was on track to export around 1.5 million bpd in 2024, up from an estimated 1.4 million bpd in 2023, according to analysts and U.S. government reports.
Iran backs several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen.
With the fast-approaching U.S. presidential election, which could alter U.S. Middle East and oil policy, President Joe Biden’s administration continued to push for peace between Israel and Hezbollah and Hamas.
“(Former President Donald) Trump is leading over (Vice President Kamala) Harris based on current data from betting markets and Trump has proposed making the U.S. a major oil supplier,” said OANDA senior market analyst Kelvin Wong, adding that such a move could depress prices.
While betting markets put Trump ahead, other polls show the result is too close to call.
Demand worries
In Europe, Euro zone business activity stalled again this month, remaining in contractionary territory as demand from both home and abroad fell despite firms barely increasing their prices, a survey showed on Thursday.
In the U.K., optimism among British firms has sunk, according to two surveys published on Thursday, six days before finance minister Rachel Reeves tries to chart a way between raising taxes and boosting growth in the new government’s first budget.
In the U.S., new applications for U.S. unemployment aid unexpectedly fell last week, but the number of people collecting benefits in mid-October was the highest in nearly three years, indicating it was becoming harder for those losing jobs to land new positions.