Oil prices fell more than 2% in early Asian trade on Thursday after US President Donald Trump said that killings in Iran's crackdown on protesters had decreased, easing market concerns about possible US military action and supply disruptions.
Brent futures fell $1.67 (2.5%) to $64.85 a barrel, while West Texas Intermediate (WTI) fell $1.54 (2.5%) to $60.48 a barrel.
Both benchmarks closed more than 1% higher on Wednesday but later gave up most of their gains following Trump's remarks.
Trump said he had been told that killings of anti-government protesters in Iran were decreasing and that there were no plans for large-scale executions.
The remarks added to selling pressure as markets expected the US would not take military action against Iran.
In addition to geopolitical factors, higher-than-expected US crude inventories also put additional pressure on prices.
Crude oil stocks rose by 3.4 million barrels to 422.4 million barrels in the week ended January 9, compared with expectations of a 1.7 million barrel decline, while gasoline stocks also rose more than analysts had expected, according to the U.S. Energy Information Administration.
The United States is also withdrawing some troops from bases in the Middle East after Iran warned its neighbor that it would attack U.S. bases if Washington acted.
In addition, Venezuela began reversing oil production cuts under a U.S. embargo, while resuming crude exports, contributing to additional pressure on prices.
On the demand side, data showed China's crude oil imports rose 17% in December 2025 from a year earlier, with daily imports hitting an all-time high, while annual imports rose 4.4%.
The Organization of the Petroleum Exporting Countries (OPEC) expects oil demand in 2027 to grow at the same rate as this year, with supply and demand nearly in balance in 2026.
While geopolitical risks remain and unexpected events could disrupt the market, analysts expect WTI to trade in the $55-$65 range for now, giving the impression that the oil market continues to be influenced by geopolitical factors and global inventories.
