Oil prices edged lower on Wednesday as diplomatic efforts to end the Russia-Ukraine war and ongoing nuclear talks between the US and Iran dampened geopolitical risk sentiment, while a sharp build in US crude inventories added to downward pressure.
International benchmark Brent crude traded at $70.69 per barrel at 9.30 a.m. local time (0630 GMT), down 0.8% from the previous close of $71.27.
US benchmark West Texas Intermediate (WTI) decreased 0.8% to $65.74 per barrel, compared with $66.27 in the previous session.
Hopes for a potential peace agreement between Russia and Ukraine strengthened expectations of easing regional tensions in the near term, weighing on prices. However, continued reports of fighting signaled that supply risks remain, limiting losses.
The third round of nuclear talks between Iran and the US, mediated by Oman, is scheduled to be held in Geneva on Thursday.
Iran's Foreign Minister Abbas Araghchi said on the US-based social media platform X that the parties have "a historic opportunity to reach an unprecedented agreement that addresses mutual concerns and serves mutual interests."
Araghchi reiterated Tehran's commitment to reaching a fair and balanced deal based on previous understandings, stressing that Iran would under "no circumstances" develop nuclear weapons while maintaining its right to peaceful nuclear technology.
US President Donald Trump, speaking during his State of the Union address to Congress, accused Iran of attempting to develop missiles capable of reaching the US.
"My preference is to solve this problem through diplomacy. But one thing is certain: I will never allow the world's number one sponsor of terror, which they are by far, to have a nuclear weapon. Can't let that happen," he said.
While fears of a potential escalation in US-Iran tensions lent some support to prices, the continuation of diplomatic contacts capped gains by easing geopolitical risk concerns.
Meanwhile, the American Petroleum Institute (API) estimated that US commercial crude inventories rose by 11.4 million barrels last week, compared with market expectations for an increase of 1.85 million barrels.
The larger-than-expected build signaled weaker energy demand in the US, the world's largest oil consumer, adding further downward pressure on prices.
By Ebru Sengul Cevrioglu
Anadolu Agency
energy@aa.com.tr
