Crude Oil Futures Decline Following Reports of Potential US-Iran Peace Talks

Crude oil futures traded lower during early trading hours on Thursday following reports indicating that the United States is seeking to revive peace negotiations with Iran.

At 10:03 am on Thursday, December Brent oil futures were recorded at $114.19, marking a decline of 0.98 per cent. December crude oil futures on West Texas Intermediate (WTI) stood at $101.32, down by 1.42 per cent.

On the Multi Commodity Exchange (MCX), November crude oil futures traded at ₹9,658 during the initial hour of trading on Thursday, compared to the previous close of ₹9,798, representing a decrease of 1.43 per cent. December futures on the exchange traded at ₹9,555 against the previous close of ₹9,689, down by 1.38 per cent.

According to reports, US Vice President JD Vance has initiated steps to revive peace talks with Iran by sending a letter to Chief of Iranian Security Council Mohsen Rezaei, citing officials familiar with the matter. Additionally, US President Donald Trump told Axios that negotiations are ongoing through mediators, stating that officials will find out if negotiations can succeed.

Iranian Foreign Minister Abbas Araghchi stated in a social media post on X that while the country's armed forces are fully prepared to defend the homeland, Iran continues to give diplomacy a chance and remains in close contact with intermediaries.

In commodities inventory news, the weekly petroleum status report released by the US Energy Information Administration (EIA) showed a decline in crude oil inventories for the week ending October 23. Commercial crude oil inventories decreased by 1.9 million barrels to 410.6 million barrels, placing levels 4 per cent below the five-year average.

During the same period, US gasoline inventories increased by 3.9 million barrels, sitting 2 per cent below the five-year average, while distillate inventories decreased by 1.5 million barrels, remaining 10 per cent below the five-year average. Total products supplied in the US averaged 20.8 million barrels a day over the past four weeks, representing a 0.2 per cent increase year-over-year.

Other commodities also saw movement during the early trading hours on Thursday. November natural gas futures on the MCX traded at ₹290.80 against the previous close of ₹293.10, down by 0.78 per cent. On the National Commodities and Derivatives Exchange (NCDEX), December turmeric contracts traded at ₹26,690 compared to the previous close of ₹26,436, up by 0.96 per cent, while November guargum futures traded at ₹15,400 against the previous close of ₹15,254, up by 0.96 per cent.

"Geopolitical developments continue to play a major role in driving short-term volatility across global commodity markets. As seen in the recent decline of crude oil futures following diplomatic signals between the US and Iran, macroeconomic factors and supply-demand data directly influence trading patterns. For businesses and energy consumers, monitoring these geopolitical shifts alongside official inventory reports remains essential for financial planning and risk management." — Dr. Shishir Gupta, Founder & CEO, StartupLanes