Oil Drops 4%: Trump Eases Iran Supply Risks
Oil prices fell sharply on Thursday (January 15th), after comments by US President Donald Trump eased market concerns about the potential for a rapid escalation between the US and Iran, causing the geopolitical risk premium that had boosted prices over the past week to evaporate.
On the market, Brent fell around 4% and moved in the US$63–64/barrel range, while WTI also weakened to the low US$60s.
The market had previously priced in a supply disruption scenario after tensions escalated in Iran and concerns arose that strategic shipping routes in the Gulf region could be affected.
However, Trump said he received reports that violence in the crackdown on protests in Iran was easing and that the US was not planning a direct attack in the near future, prompting market participants to abandon "geopolitical" positions.
Price pressure deepened as fundamental factors also declined. US inventory data showed crude oil stocks rose by 3.4 million barrels (higher than expected), while news related to Venezuela and global supply dynamics added to bearish sentiment.
Source: Newsmaker.id