Oil Prices Plunge, Sentiment Turns Bearish
Oil prices plunged sharply on Thursday, after the market "cut" the risk premium on Iran following US President Donald Trump's statement that escalation could be contained. Bearish sentiment intensified due to surging US oil inventories and hopes for additional supply from Venezuela.
In European trading, Brent fell to around US$64.8/barrel, while WTI weakened to around US$60.5/barrel (a decrease of >2%).
Previously, the contract had also recorded a deeper decline, with Brent at ~US$64.31 and WTI at ~US$59.97 in the Asian session.
"Iran Premium" Slashed
Oil lost steam after Trump announced that the killings/violent crackdown on protests in Iran were beginning to cease, easing market concerns about the possibility of US military action—and potential supply disruptions.
Previously, tensions had escalated after signals emerged that Iran would threaten retaliation against US bases if Washington attacks. The US reportedly withdrew some personnel from bases in the Middle East as a precautionary measure.
US Stockpile Data Adds Pressure
From a fundamental perspective, the latest EIA report showed that US crude oil stocks rose by 3.4 million barrels to approximately 422.4 million barrels for the week ending January 9—contrary to market expectations of a decline.
Gasoline stocks also rose, reinforcing the impression that supplies remain relatively tight and pressuring prices.
Venezuela is also a bearish factor.
Additional pressure comes from news that Venezuelan oil exports are starting to pick up again, and the local state oil company is said to be reversing some of the production cuts previously implemented under US restrictions/embargoes.
But demand remains a restraining factor.
On the demand side, OPEC sees demand growth continuing into 2027 and assesses the market balance for 2026 as relatively close to equilibrium, in contrast to some other projections that predict a large surplus.
Meanwhile, Chinese government data showed crude oil imports surged in December, with daily imports reaching a record, providing a cushion to the Asian demand outlook.
Source: Newsmaker.id
