Oil prices slipped on Thursday after posting gains in the previous two sessions, as traders reassessed the outlook for supply and demand and reacted to data showing an increase in U.S. crude and gasoline inventories last week.
Brent crude fell 28 cents, or 0.43%, to $64.96 a barrel by 07:49 GMT, while March West Texas Intermediate eased 19 cents, or 0.31%, to $60.43 a barrel.
Both benchmarks had risen more than 0.4% on Wednesday, following a 1.5% jump the day before, after OPEC+ producer Kazakhstan suspended production at its Tengiz and Korolev oilfields due to power supply problems.
Market sentiment was also influenced on Wednesday by comments from U.S. President Donald Trump, who softened his stance on Greenland by ruling out the use of force and stepping back from tariff threats directed at Europe.
The easing of rhetoric around Greenland could lower trade tensions between the U.S. and Europe, which would be supportive for global growth and oil demand, said Mingyu Gao, chief researcher for energy and chemicals at China Futures.
“At the same time, the United States has not ruled out possible military involvement in Iran, which is also supporting oil prices,” Gao said.
Trump said on Wednesday that he hoped there would be no further U.S. military action involving Iran, but warned that Washington would respond if Tehran were to restart its nuclear programme.
Taking into account developments around Greenland and the reduced likelihood of action in Iran, oil prices are likely to stabilise around $60 a barrel, according to Tony Sycamore, an analyst at online broker IG.
Also on Wednesday, Trump said he believed “we’re reasonably close” to reaching a deal to end the war between Russia and Ukraine, adding that he would meet Ukrainian President Volodymyr Zelenskiy later in the day.
A resolution to the conflict could lead to the lifting of U.S. sanctions on Russia, potentially easing supply disruptions and putting downward pressure on oil prices.
Meanwhile, the International Energy Agency raised its forecast for global oil demand growth in 2026 in its latest monthly oil market report published on Wednesday, pointing to a slightly smaller market surplus this year.
On the supply side, U.S. crude and gasoline inventories increased last week, while distillate stocks declined, according to market sources citing data from the American Petroleum Institute.
Crude inventories rose by 3.04 million barrels in the week ended January 16, the sources said on condition of anonymity. Gasoline stocks climbed by 6.21 million barrels, while distillate inventories fell by 33,000 barrels.
A Reuters poll of eight analysts had forecast an average increase of around 1.1 million barrels in crude inventories for the same period.
“High crude inventories are limiting further gains in oil prices in an oversupplied market,” said Yang An, an analyst at Haitong Futures.