Oil wavered as traders balanced expectations of modest OPEC production hikes in April and bearish US government data against increasing pressure on Iran over its nuclear program.
West Texas Intermediate swung in a roughly $1.50 range, settling down 0.3% at above $65 a barrel. Brent closed above $71 a barrel. Traders have been parsing signals over whether Iran’s concessions over its nuclear ambitions will be enough to achieve a detente with the US.
President Donald Trump’s administration announced Wednesday new sanctions on entities that support Iranian oil and weapons sales. Trump, in his State of the Union address, said Iran is working to reconstitute its nuclear program, adding to speculation that the US is preparing for military action.
Iran has long maintained its nuclear program is for peaceful purposes.
The OPEC member accounts for about 3% of global oil supply, producing roughly 3.3 million barrels per day. Traders are watching for any disruptions, including to a key shipping route, the Strait of Hormuz. Tankers carrying liquefied natural gas also transit through the narrow waterway separating Iran and the Arabian Peninsula.
Meanwhile, the US Energy Information Administration reported on Wednesday that overall crude inventories climbed by nearly 16 million barrels, the biggest gain since February 2023, though a handful of product stockpiles marginally declined. Even as the report caps gains, traders are treating the data with caution, citing atypical weather conditions and a sizable adjustment factor.
Further offsetting Iran related bullish momentum, some OPEC+ delegates said they expect the group will agree to resume modest production increases when it meets this weekend to review policy for April.