Oil prices declined on Thursday as investors adopted a cautious stance amid mixed signals from former U.S. President Donald Trump on potential U.S. involvement in the ongoing Israel-Iran conflict, while the Federal Reserve left interest rates unchanged, adding to market indecision.
Brent crude futures fell by 20 cents (0.26%) to $76.50 per barrel by 0421 GMT, following a 0.3% gain in the previous session, which had earlier seen intraday losses of up to 2.7%. Meanwhile, U.S. West Texas Intermediate (WTI) crude for July delivery slipped 4 cents (0.05%) to $75.10 per barrel, after rising 0.4% in the prior session despite a steep drop of 2.4%.
The July WTI contract is set to expire on Friday, with the more active August contract easing by 8 cents (0.11%) to $73.42 per barrel.
Market volatility continues as traders monitor the Middle East geopolitical landscape, with oil prices holding a “healthy risk premium”, according to Tony Sycamore, market analyst at IG.
“There’s a healthy risk premium baked into the price as traders await to see whether the next stage of the Israel-Iran conflict is a U.S. strike or peace talks,” Sycamore wrote in a client note.
The Federal Reserve’s decision to keep rates unchanged has done little to clarify market direction, leaving commodities like oil exposed to broader macroeconomic and geopolitical crosswinds.
