Petroleum prices caved more than 2% on Wednesday after U.S. President Donald Trump again asserted that the Iran war will ?end “very quickly”, though investors remain wary about the outcome of peace talks as disruption to Middle Eastern supply continues.
Brent crude futures fell 2.5% to $108.52 a barrel and U.S. West Texas Intermediate futures were down 2.3% at $101.81. Both contracts ?were heading for their biggest daily drops in percentage and absolute terms in two weeks.
Both benchmarks fell nearly $1 ?on Tuesday after U.S. Vice President JD Vance said that the U.S. and Iran had made progress in talks. But ?Trump also said that the United States may need to strike Iran again and had been an hour away from ordering an attack before its postponement.
Analysts at Citi said on Tuesday that it expected Brent crude to rise to $120 a barrel in the near term, stating ?that oil markets are underpricing the risk of prolonged supply disruption, and Wood Mackenzie estimated that it could ?approach $200 if the Strait of Hormuz stays largely shut until the end of the year.
U.S. crude stockpiles reported by the Energy Information Administration are expected to have fallen by about 3.4 million barrels, a Reuters poll showed. The weekly EIA data was due ?at 10:30 EDT
In other signs of the increasing supply crunch, Britain has watered ?down sanctions to allow imports of diesel and jet fuel refined abroad from Russian crude.
Saudi Arabia’s crude oil exports and production dropped to record lows ?in March, data showed.
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