Oil prices traded mostly unchanged during Asian hours on Thursday, as investors positioned ahead of the third round of U.S.-Iran nuclear talks, seen as a key event for short-term price direction.
Brent crude futures for April delivery rose 0.3% to $71.03 per barrel, while West Texas Intermediate (WTI) crude gained 0.2% to $65.55 per barrel as of 22:42 ET (03:42 GMT).
Market attention is focused on renewed negotiations between Washington and Tehran. U.S. special envoy Steve Witkoff and Jared Kushner are expected to meet Iranian officials in Geneva, with discussions centered on Iran’s nuclear and ballistic missile programs. Iranian Foreign Minister Abbas Araqchi indicated that a diplomatic solution remains possible if both sides engage constructively. Meanwhile, President Donald Trump warned that failure to achieve progress could lead to serious consequences.
Analysts at ING noted that a constructive outcome could lead markets to gradually remove an estimated $10 per barrel geopolitical risk premium currently embedded in oil prices. However, if negotiations collapse, upside risks remain, although traders may wait for clearer signals regarding potential U.S. action against Iran before reacting fully.
Iran remains one of the larger producers within OPEC, and its crude exports play an important role in global supply. Any disruption, particularly in the Strait of Hormuz — a critical transit route for a significant portion of global oil trade — could trigger a sharp rise in prices. ING analysts added that a de-escalation scenario, combined with a potential increase in supply from OPEC+ starting in April, could weigh on oil prices if weaker underlying fundamentals come into focus.
On the supply front, fresh data from the U.S. Energy Information Administration showed a substantial and unexpected rise in U.S. crude inventories. Commercial crude stockpiles increased by 16 million barrels in the week ending February 20, far above market forecasts and marking the largest weekly build in approximately three years.
At the same time, gasoline inventories declined by about 1 million barrels, while distillate stocks rose modestly by around 250,000 barrels. Lower refinery activity also contributed to the significant increase in crude inventories.
