Oil falls over $1 on easing geopolitical fears and oversupply worries

Brent futures fall $1.47, or 1.58%, to $91.29 a barrel

 Oil prices fell more than $1 per barrel on Thursday as easing concerns over an escalation of conflict in the Middle East reduced the risk premium in crude markets, while rising OPEC+ output and growing US inventories ​fed worries about oversupply.

Brent futures were down $1.47, or 1.58%, to $91.29 a barrel. US West Texas Intermediate crude futures slipped $1.24, or 1.43%, to $85.29.

The declines reversed ⁠Wednesday's gains, when Brent rose 1.4% and WTI added 0.6% after both benchmarks hit two-month lows ​the previous day.

"Markets are falling on expectations that behind-the-scenes efforts are underway to secure a ceasefire ​between Russia and Ukraine and that it is unlikely the Iran war will escalate ahead of the US-China summit next week," said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.

"However, given the uncertainty surrounding ​the Strait of Hormuz, the markets are unlikely to suffer a significant collapse," Kikukawa said.

Russian and ​Ukrainian negotiators agreed to a major prisoner exchange at two days of peace talks in Abu Dhabi that ended ‌on ⁠Wednesday, although US mediators said differences remained on other major issues, including territory.

Read: Oil prices slide 2% to two-month low

Ukrainian President Volodymyr Zelenskiy said Kyiv hoped to achieve concrete results on resolving the war this year.

Meanwhile, Iran will not allow even a single particle of enriched nuclear material to leave the country and there will be consequences ​if the US launches ​new strikes, Iranian security ⁠chief Mohsen Rezaei said in televised remarks.

Washington has said nuclear issues must be part of any initial negotiations with Iran aimed at ending the eight-month-old ​war, while US officials downplayed the need for further military strikes.

Adding to ​bearish sentiment in ⁠oil markets, OPEC+ crude production rose in October, driven by higher Saudi Arabian output despite ongoing shipping disruptions through the Strait of Hormuz.

US crude stocks rose by 9 million barrels in the latest week, market sources ⁠said, citing ​data from the American Petroleum Institute. Official data from ​the US Energy Information Administration is due on Thursday, delayed a day due to a US national holiday on Wednesday.