Oil prices fall as US inventories rise
Oil prices extended losses in Asian trade on Thursday after data showed a surprise increase in US crude inventories, while uncertainty ahead of renewed US-Iran nuclear talks next week fueled concerns about a supply glut.
In the previous session, oil closed lower after a volatile session, initially jumping more than 1.5% on a CNN report that Israel could strike Iranian nuclear sites. At 8:48 p.m. ET (01:55 GMT), Brent crude futures expiring in July were down 0.5% at $64.61 a barrel, while West Texas Intermediate (WTI) crude was down 0.4% at $61.30 a barrel.
US-Iran talks to resume next week; supply glut concerns persist
A fifth round of nuclear talks between Iran and the United States is scheduled for Friday, May 23, in Rome, with Oman continuing its role as a mediator. Iran’s uranium enrichment activities remain a key topic of discussion. While the US demands a complete halt to enrichment, Iran insists on its right to enrich uranium for peaceful purposes.
If negotiations continue or lead to an easing of US sanctions, Iran could increase its crude oil exports. Currently, Iran exports oil at a lower rate due to sanctions, but it has significant capacity as it is the third-largest producer among OPEC members. This comes at a time when members of the OPEC+ cartel have been ramping up production starting this month, further underscoring the supply surplus scenario.
Oil prices had risen sharply in early trading on Wednesday after CNN reported that Israel was preparing for a potential military strike on Iran’s nuclear facilities. The report said that Israeli leaders had not made a final decision, but the possibility of an Israeli strike had “increased significantly” in recent months.
US crude oil inventories unexpectedly surge - EIA
US crude oil inventories unexpectedly rose for the week ending May 16, 2025, raising concerns about oversupply and contributing to lower oil prices. The Energy Information Administration (EIA) reported a 1.3 million-barrel increase in crude stocks, bringing total inventories to 443.2 million barrels. The increase was in line with analysts’ expectations for a 1.3 million-barrel draw.
Additionally, gasoline and distillate inventories rose by 816,000 and 580,000 barrels, respectively, amid weak demand indicators. The American Petroleum Institute (API) also reported an unexpected 2.5 million-barrel increase in US crude oil inventories a day earlier.
While the start of the US summer driving season after Memorial Day could boost demand and help reduce inventories, forecasts and recent data points suggest supply is outpacing demand.
Source: Investing.com
