Oil prices eased on Thursday in volatile trade as investors braced for the possible return to global markets of sanctioned Iranian oil exports and on worries that rising U.S. interest rates would weaken fuel demand.
The prospect that the OPEC+ producer group could curb oil supplies limited the decline in oil prices.
Brent crude lost 2 cents to trade at $101.19 a barrel by 1:16 p.m. EDT (1741 GMT). U.S. West Texas Intermediate crude fell 35 cents to $94.56 a barrel.
Talks between the European Union, the United States and Iran to revive the 2015 nuclear deal are continuing, with Iran saying it had received a response from the United States to the EU’s “final” text to resurrect the agreement.
“Nobody wants to jump in here and commit to a size position when you can get ambushed by an Iranian headline at any given moment,” said Bob Yawger, director of energy futures at Mizuho, citing thin trading volumes during the session.
Investors also were waiting for scheduled remarks on Friday by U.S. Federal Reserve Chair Jerome Powell at the Kansas City Fed’s Economic Policy Symposium in Jackson Hole, Wyoming.
“The (market) is a little bit concerned about what Jerome Powell is going to say tomorrow about rising interest rates,” said Phil Flynn, an analyst at Price Futures group in Chicago.
Powell is expected to summarize where the Fed stands in its fight to control inflation, including information about its rate-path hike in the long and short-term.
Limiting the downside for oil prices were comments on Monday by Saudi Energy Minister Prince Abdulaziz bin Salman that helped push prices to three-week highs, when he flagged the possibility that OPEC+ could cut production.
“It may (make) the chance of a move back below $90 in the near-term hard to come by unless a nuclear deal is agreed upon and OPEC+’s appetite for cuts put to the test,” Oanda analyst Craig Erlam said.
Falling U.S. crude and product stockpiles also helped support prices. Oil inventories fell by 3.3 million barrels in the week to Aug. 19 to 421.7 million barrels, steeper than analysts’ expectations in a Reuters poll for a 933,000-barrel drop.
The bullish impact was countered by a drawdown in gasoline inventories that was less than expected, reflecting weak demand.
U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6 million barrels. Analysts had forecast a 1.5 million-barrel drop.
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