The West Texas Intermediate crude oil prices slipped back below the $60 per barrel level as geopolitical tensions eased.
Both oil benchmarks, WTI and Brent, fell more than 4% at one point during Thursday after US President Donald Trump announced that the killings of demonstrators during protests in Iran were ending.
This alleviated concerns over Trump’s earlier comments, hinting at a US military action against Iran.
At the time of writing, the price of WTI crude was at $59.93 per barrel, down 3.4%, while Brent was also 3.4% lower at $64.29 a barrel.
Trump dials down tensions
Expectations of a potential US attack on Iran were reduced following Trump’s remarks, causing Brent futures to give back most of the gains made earlier in the day when they had risen above $66.50 a barrel on Wednesday.
A US official announced on Wednesday that the country is pulling back some military personnel from Middle Eastern bases.
This action follows a statement from a senior Iranian official who warned that Tehran would target American bases if Washington launched a strike, a message that Iran has conveyed to its neighbours.
Meanwhile, Venezuela was now starting to reverse the oil production cuts that were put in place following the US embargo.
The resumption of crude exports signals the gradual return of Venezuelan supply to global markets.
On Monday, two supertankers departed Venezuelan waters, each carrying an estimated 1.8 million barrels of crude.
According to sources cited by Reuters, these shipments may represent the first deliveries tied to a 50-million-barrel supply agreement with the United States.
“Reports that Venezuela has begun reversing production cuts and resumed exports raised concerns about increased global supply, with two super tankers already leaving port,” said David Morrison, senior market analyst at Trade Nation.
US crude inventories rise
US crude oil prices are facing continued downward pressure following an unexpected increase in crude inventories.
The latest weekly report from the Energy Information Administration (EIA) revealed that US crude stockpiles climbed by 3.391 million barrels in the week ending January 14.
This rise contradicted market forecasts, which had anticipated a decrease of approximately 2.2 million barrels, and marked a reversal from the 3.831 million barrel draw seen the week prior.
Regarding the demand side, the Organization of the Petroleum Exporting Countries’ recent data, released on Wednesday, suggests that oil demand in 2027 is expected to increase at a rate similar to this year’s.
This projection also indicated a near equilibrium between supply and demand in 2026, which stood in contrast to other forecasts predicting a market glut.
Additionally, Chinese government data indicated that crude oil imports soared in December 2025, rising 17% from the previous year.
Overall crude imports for 2025 were up 4.4% in China. The Asian giant is the world’s biggest importer of crude oil.
Daily crude import volumes reached unprecedented levels in December and throughout 2025, according to the report.
James Hyerczyk, technical analyst, said in a FXempire report:
This is probably the main reason the market hasn’t penetrated $50.00 support despite the growing global supply.
Outlook
“Looking ahead, despite Trump’s comments, the Iran situation hasn’t been taken off the table,” Hyerczyk said.
The area remains a volatile hotbed, suggesting a continuing risk of supply disruption, he added.
Consequently, the market must be ready for new buying to emerge if the price tests the value area between $58.93 and $58.29 for WTI prices, according to Hyerczyk.
So be prepared for a technical bounce later today.
Alternatively, the market may trade within a restricted range, bounded by the 50-day and 200-day moving averages.
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