LONDON: Oil prices fell on Thursday as a sharp rise in U.S. crude inventories and signs of weakness in the physical oil market weighed on sentiment, while traders assessed whether U.S.-Iran talks could avert a supply-threatening military conflict.
Brent futures were at $70.03 a barrel, down 82 cents, or 1.16%, by 1021 GMT. U.S. West Texas Intermediate (WTI) fell 79 cents, or 1.2%, to $64.63 a barrel.
U.S. crude inventories rose by 16 million barrels last week, the biggest build in three years, the Energy Information Administration said on Wednesday.
Weakness in the North Sea physical market is also pressuring prices, UBS analyst Giovanni Staunovo said, adding that markets would focus on the outcome of a third round of U.S.-Iran talks scheduled for Thursday. The North Sea physical market underpins the Brent futures contract.
Oil futures are up about 15% so far in 2026, as fears of a U.S.-Iran confrontation have offset expectations of oversupply.
U.S. envoy Steve Witkoff and Jared Kushner are due to meet an Iranian delegation in Geneva, traders said.
On the supply side, Saudi Arabia is boosting oil production and exports under a contingency plan in case any U.S. strike on Iran disrupts Middle East supplies, two sources familiar with the plan said on Wednesday.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, is likely to consider raising output by 137,000 barrels per day for April, three sources said, as the group positions for peak summer demand and a price lift from heightened U.S.-Iran tensions.
Brent rose on Monday to its highest since July 31 as Washington positioned military forces in the Middle East to press Iran to negotiate an end to its nuclear and ballistic missile programme. An extended conflict could disrupt supplies from Iran, OPEC’s third-biggest producer, and other Middle East exporters.
ING analysts said the outcome of Thursday’s talks will be key for oil prices. A constructive resolution could prompt markets to unwind as much as a $10-a-barrel risk premium they believe is currently priced in.__ Reuters
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