Oil prices drop more than $1 as hopes for Iran, Ukraine peace talks pressure markets

"Markets are ​falling on expectations that behind-the-scenes efforts are underway to secure a ​ceasefire between Russia and Ukraine and that it is unlikely the ⁠Iran war will escalate ahead of the US-China summit next week," said Hiroyuki ​Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.

"However, given ​the uncertainty surrounding the Strait of Hormuz, the markets are unlikely to suffer a significant collapse," Kikukawa said. Russian and Ukrainian negotiators agreed to a major prisoner exchange at two days of ​peace talks in Abu Dhabi that ended on Wednesday, although US mediators said ​differences remained on other major issues, including territory.

Ukrainian President Volodymyr Zelenskiy said Kyiv hoped to ‌achieve concrete ⁠results on resolving the war this year. Meanwhile, Iran will not allow even a single particle of enriched nuclear material to leave the country and there will be consequences if US launches new strikes, Iranian security chief Mohsen Rezaei said in ​televised remarks.

Washington has ​said nuclear issues ⁠must be part of any initial negotiations with Iran aimed at ending the eight-month-old war, while US officials downplayed the need ​for further military strikes. OPEC+ crude oil production jumped in October, ​led by ⁠a sharp increase in output from Saudi Arabia despite continued disruption to shipments through the Hormuz Strait.

US crude stocks rose by 9 million barrels in the latest week, market ⁠sources ​said, citing data from the American Petroleum Institute. ​Official data from the US Energy Information Administration is due on Thursday, delayed a day due to ​a US national holiday on Wednesday.