Oil prices moved lower on Thursday as traders weighed improving supply conditions against ongoing geopolitical uncertainty in the Middle East.
Stronger expectations for uninterrupted crude flows and abundant global production continued to pressure the market.
Oil Prices Fall in Early Trading
U.S. West Texas Intermediate crude futures fell 1.4% to $67.64 per barrel by 00:01 ET, or 04:01 GMT.
Brent crude futures declined 1.3% to $70.67 per barrel.
The losses reflected reduced concerns about an immediate disruption to Middle East oil supplies.
US-Iran Talks Show Limited Progress
Investors also assessed the outcome of indirect talks between the United States and Iran in Doha.
Negotiators completed two days of technical discussions without reaching a major breakthrough toward a permanent peace agreement.
However, Qatar said the talks had made positive progress. Both sides also agreed to continue negotiations.
The discussions focused on shipping through the Strait of Hormuz and other confidence-building measures.
Strait of Hormuz Risks Remain in Focus
Although tensions have eased since the recent conflict, traders continue to monitor the region closely.
The Strait of Hormuz remains one of the most important shipping routes for global oil supplies. Any disruption could quickly affect crude prices and energy markets.
For now, however, supply flows appear stable.
Crude shipments through the Strait of Hormuz rose above 10 million barrels per day. This increase suggested that traders were becoming more confident that oil exports would continue despite ongoing political risks.
Record US Production Pressures Crude
Fresh data from the U.S. Energy Information Administration added to expectations of strong supply.
U.S. crude production reached a record 13.93 million barrels per day in April.
The increase reinforced concerns that the oil market could remain well supplied, especially if global demand growth slows.
Easing Tensions Reduce Supply Concerns
ANZ said lower geopolitical tensions had reduced fears of major supply disruptions.
However, the bank noted that continued uncertainty in the Middle East was still providing some support for oil prices.
ANZ also reported that its China Commodity Index rose 0.5%.
The energy component increased by the same amount, suggesting that underlying commodity demand remained resilient despite the recent decline in crude prices.
OPEC+ Production Plans in Focus
Oil traders are also watching for signs that OPEC+ could raise production again in August.
Higher output from the producer group would add more supply to an already well-stocked market.
An increase could place further pressure on crude prices unless demand strengthens at the same time.
US Inventory Data Could Move Oil Prices
Upcoming U.S. crude inventory figures may provide the next major catalyst for the market.
A larger-than-expected increase in stockpiles could reinforce concerns about oversupply.
In contrast, a sharp inventory decline could provide some support for oil prices.
Oil Market Awaits Fresh Direction
The near-term outlook for crude will depend on several factors.
Traders will continue monitoring U.S.-Iran negotiations, shipping activity through the Strait of Hormuz, OPEC+ production plans, and U.S. inventory data.
For now, improving supply expectations and record U.S. output are keeping pressure on both Brent and WTI crude.
