Global oil prices fell by about 4% on Wednesday following growing expectations of a possible ceasefire that could ease supply disruptions from the Middle East, a key oil-producing region.
Brent crude futures dropped $4.89, or 4.7%, to $99.60 per barrel by early trading hours, after earlier falling as low as $97.57. Similarly, U.S. West Texas Intermediate (WTI) crude declined by $3.54, or 3.8%, to $88.81 per barrel, after hitting an intraday low of $86.72.
The decline comes after both benchmarks recorded gains of nearly 5% on Tuesday, reflecting heightened volatility in the global oil market.
Market analysts attribute the drop to increasing optimism over diplomatic progress between the United States and Iran. Reports indicate that Washington has presented a 15-point proposal aimed at ending the ongoing conflict between the two nations.
Speaking on the development, Hiroyuki Kikukawa, chief strategist at Nissan Securities, said, “Expectations of a ceasefire have risen slightly and profit-taking is leading the market. But the outlook remains uncertain as to whether negotiations will succeed, limiting selling.”
Meanwhile, U.S. President Donald Trump confirmed that progress was being made in negotiations, further boosting hopes of a resolution.
Despite the optimism, analysts caution that uncertainty surrounding the outcome of the talks could continue to drive fluctuations in oil prices in the near term.
