Oil prices slipped on Thursday, erasing part of Wednesday's sharp gains, as uncertainty over U.S.-Iran diplomacy and data showing a larger-than-expected drawdown in U.S. crude stocks weighed on sentiment.
Brent November crude fell about 1% to $102.10 a barrel as of 20:32 ET. West Texas Intermediate lost 0.7% to $91.50 a barrel. Both benchmarks had surged Tuesday — Brent rallied nearly 4% and WTI climbed almost 2% — on optimism that diplomatic discussions between Washington and Tehran could ease a Middle East crisis that threatened to disrupt supplies.
The Energy Information Administration reported on Wednesday that U.S. crude inventories rose by 3 million barrels last week to 426.4 million, well above analyst forecasts for a 640,000-barrel draw. Gasoline stocks fell 1.7 million barrels and distillate inventories, which include diesel and heating oil, declined by 400,000 barrels.
U.S.-Iran tensions dominated the broader market picture. Iranian President Masoud Pezeshkian addressed the United Nations General Assembly, saying Iran would not surrender to U.S. pressure but adding that Tehran remained open to diplomacy. The comments came a day after U.S. President Donald Trump warned he could "annihilate" Iran if a deal to de-escalate the conflict could not be reached.
Mohsen Rezaei, Iran's security chief, said Wednesday that the Strait of Hormuz would not reopen until Tehran's conditions were met. The strait normally handles roughly one-fifth of global oil and gas shipments. Indirect talks between Washington and Tehran have included the possible reopening of the waterway alongside the lifting of a U.S. naval blockade on Iran.
In other supply developments, Saudi Arabia restarted operations on its East-West pipeline running to the Red Sea, while Iraq increased exports and signaled plans to raise shipments through Turkey.
Earlier in the session, ultra-low-sulfur diesel futures dropped sharply after a report emerged that the White House was considering a 90-day ban on diesel exports. The White House subsequently dismissed the report as "fake news," removing a key source of uncertainty in the refined-products market.
