Oil futures were slightly lower Wednesday morning, extending this week’s pullback from seven-year highs as traders await data on U.S. supplies, monitor talks aimed at returning Iran to an international nuclear accord, and keep an eye on the threat of a Russian invasion of Ukraine.
West Texas Intermediate crude for March delivery CL.1, -0.32% CLH22, -0.32% fell 33 cents, or 0.4%, to $89.03 a barrel on the New York Mercantile Exchange.
April Brent crude BRN00, -0.11% BRNJ22, -0.11%, the global benchmark, edged down 14 cents, or 0.2%, to $90.64 a barrel on ICE Futures Europe. Both WTI and Brent have pulled back this week after ending Friday at their highest since 2014.
March natural-gas futures NGH22, -4.10% fell 3.7% to $4.091 per million British thermal units.
March gasoline RBH22, +0.42% rose 0.3% to $2.6338 a gallon. March heating oil HOH22, +0.03% was down 0.1% at $2.7913 a gallon.
The U.S. is participating indirectly in international talks in Vienna aimed at restoring the Iran nuclear accord. The Trump administration pulled the U.S. out of the agreement in 2018, renewing sanctions on Tehran that sharply curtailed the major oil producer’s crude exports. Iran has subsequently breached major parts of the agreement. U.S. and Iranian officials on Tuesday said a deal could be within reach, though the prospect of an agreement is stirring debate in Washington.
Lifting sanctions could see Iran unleash 1 million barrels a day or more of crude and condensate production within four to six months, according to analysts at Rystad Energy.
Market watchers said crude was also drifting lower as fears of a Russian invasion of Ukraine appeared to ease, though tensions remain high.
“Bottom line, oil prices had become overbought in recent sessions and the Iran and Ukraine headlines each offered excuses for bulls to take near-term profits,” wrote analysts at Sevens Report Research, in a Wednesday note.
Meanwhile, supply data will also be in focus. The American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 2 million barrels for the week ended Feb. 4, according to sources. The API also reportedly showed weekly inventory declines of 1.1 million barrels for gasoline and 2.2 million barrels for distillates. Crude stocks at the Cushing, Okla., delivery hub edged down by 2.5 million barrels last week, sources said.
Official inventory data from the Energy Information Administration will be released Wednesday. On average, the EIA is expected to show crude inventories rose by 100,000 barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also calls for a weekly supply rise of 1.4 million barrels for gasoline and an inventory decrease of 600,000 barrels for distillates.