Investing.com-- Oil prices fell sharply Thursday on concerns that a potential nuclear deal between Iran and the U.S. could lead to an increase in global supply.
At 04:05 ET (08:05 GMT), Brent Oil Futures dropped 3.1% to $64.06 per barrel, while West Texas Intermediate WTI crude futures slumped 3.3% to $61.06 per barrel.
Both contracts declined on Wednesday, stalling a four-day rally, to slip away from the two-week high reached earlier this week.
U.S.-Iran nuclear deal close - Trump
U.S. President Donald Trump said on Thursday that the United States was getting very close to securing a nuclear deal with Iran, and Tehran had "sort of" agreed to the terms.
"We’re in very serious negotiations with Iran for long-term peace," Trump said on a tour of the Gulf, according to a pool report by AFP.
Fresh talks between Iranian and U.S. negotiators to resolve disputes over Tehran’s nuclear program ended on Sunday, with further negotiations planned.
It was thought at the time that both sides remain deeply divided, with Tehran publicly insisting on continuing its uranium enrichment, something that is seen as something the U.S. will not accept.
IEA cuts oil demand growth forecast
Also weighing was the decision of the International Energy Agency to cut its global oil demand growth forecast for the rest of 2025, to 650,000 barrels per day, citing economic headwinds combined with record sales of electric vehicles.
That marks a slowdown from the 990,000 bpd the IEA measured for demand growth over January-March.
"Increased trade uncertainty is expected to weigh on the world economy and, by extension, oil demand," the IEA said in its May oil market report.
U.S. oil stocks jump unexpectedly
The U.S. Energy Information Administration reported on Wednesday that commercial crude oil inventories increased by 3.5 million barrels in the week ending May 9, reaching a total of 441.8 million barrels.
This build contrasts with analysts’ expectations of a 2 million barrel drawdown.
API industry data had also showed a large build of 4.3 million barrels in crude stocks last week.
This comes as the Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, has been increasing supply.
"We’ll have to wait until 1 June to see what the group decides for its output policy for July," said analysts at ING, in a note.
"Already announced supply hikes by OPEC+ should be welcomed by Trump, given his desire to see lower oil prices. However, he may want to be careful on how low prices go, given the impact it will have on the US oil industry, causing a pullback in drilling activity."
Ayushman Ojha contributed to this article.