Oil prices edged lower on Thursday, giving back part of the gains from earlier sessions, as investors reassessed the balance between supply and demand and reacted to data pointing to higher U.S. crude and gasoline inventories.
Brent crude slipped 28 cents, or 0.43%, to $64.96 a barrel by 07:49 GMT. March West Texas Intermediate fell 19 cents, or 0.31%, to $60.43 a barrel.
Both benchmarks had climbed more than 0.4% on Wednesday, extending a 1.5% rally from the previous day, after OPEC+ producer Kazakhstan temporarily halted output at the Tengiz and Korolev fields because of power distribution issues.
Market sentiment was also shaped by comments from U.S. President Donald Trump, who on Wednesday softened his stance on Greenland by ruling out the use of military force and retreating from tariff threats aimed at Europe.
The easing of rhetoric around Greenland could help lower trade frictions between the United States and Europe, providing support for global economic activity 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 related to Greenland and the reduced likelihood of action in Iran, oil prices are likely to hover 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.
An end to the conflict could lead to the lifting of U.S. sanctions on Russia, easing supply constraints and putting downward pressure on prices.
Meanwhile, the International Energy Agency lifted its forecast for global oil demand growth in 2026 in its latest monthly report, pointing to a slightly smaller market surplus this year.
On the inventory front, U.S. crude and gasoline stocks rose last week, while distillate inventories declined, according to market sources citing figures from the American Petroleum Institute.
Crude inventories increased by 3.04 million barrels in the week ended January 16, the sources said. 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 period.
“High crude inventories are limiting further upside in oil prices in an oversupplied market,” said Yang An, an analyst at Haitong Futures.
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