Oil declines by over 1% amid anticipations surrounding a US-Iran nuclear agreement. Oil prices experienced a decline on Thursday, attributed to the prospects of a US-Iran nuclear agreement. An unexpected increase in US crude oil inventories was also observed. An Iranian official indicated a readiness to negotiate with the US contingent upon the removal of sanctions. Saudi Arabia expresses its support for the ongoing nuclear negotiations between the United States and Iran. The United States has imposed sanctions aimed at Iran’s production of components for ballistic missiles.

Oil prices declined by nearly $1 in early trading on Thursday, driven by expectations surrounding a potential U.S.-Iran nuclear agreement. Additionally, an unexpected increase in U.S. crude oil inventories last week amplified investor apprehensions regarding oversupply. Brent crude futures experienced a decline of 88 cents, representing a 1.3% decrease, settling at $65.21 per barrel as of 0055 GMT. U.S. West Texas Intermediate crude futures decreased by 92 cents, representing a decline of 1.5%, settling at $62.23. Both benchmarks experienced a decline of approximately 0.8% on Wednesday.

An Iranian official indicated in an interview with NBC News published on Wednesday that Iran is prepared to reach an agreement with the U.S. contingent upon the removal of economic sanctions. “Fresh selling was triggered by expectations that a U.S.-Iran nuclear deal would ease recently tightened U.S. sanctions on Iran, potentially loosening the global crude supply-demand balance,” stated Yuki Takashima, economist at Nomura Securities.

Saudi Arabia expresses its complete support for the U.S.-Iran nuclear negotiations and anticipates favorable outcomes, stated the kingdom’s foreign minister, Prince Faisal bin Farhan Al-Saud, on Wednesday. On Wednesday, Washington imposed sanctions aimed at curbing Iran’s domestic production of ballistic missile components, as stated by the U.S. Treasury Department. This action follows the sanctions enacted on Tuesday against approximately 20 companies within a network that has historically facilitated the transfer of Iranian oil to China. The sanctions were implemented after a fourth round of discussions between the U.S. and Iran in Oman, which sought to resolve issues related to Iran’s nuclear program.

The Organization of the Petroleum Exporting Countries and allied producers, referred to as OPEC+, has been augmenting supply; however, OPEC on Wednesday revised downward its projection for growth in oil supply from the United States and other producers outside the broader OPEC+ coalition for this year. In the latest report from the Energy Information Administration, crude stockpiles increased by 3.5 million barrels, reaching a total of 441.8 million barrels for the week ending May 9. This figure stands in stark contrast to analysts’ forecasts, which anticipated a draw of 1.1 million barrels, as indicated by a Reuters poll. According to industry data from the API, there was a significant increase of 4.3 million barrels in crude stocks last week, as reported by market sources on Tuesday.