WTI declines below $63.00 as US-Iran talks loom

• WTI price edges lower to $62.85 in Friday’s Asian session. 

• Traders brace for the upcoming US-Iran talks and ongoing Russia-Ukraine negotiations. 

• US crude inventories fell by 3.455 million barrels last week, according to the EIA. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $62.85 during the Asian trading hours on Friday. The WTI price declines after the United States (US) and Iran agreed to hold talks in Oman on Friday. 

Tehran aims to focus talks on its long-standing nuclear dispute with Western powers, while the US wants the agenda to include Iran's ballistic missile program, its alleged backing of armed groups across the Middle East, and its domestic human rights record. US President Donald Trump warned last month that he could order strikes on Iran if Tehran fails to agree to a deal around its nuclear program. Traders will closely monitor the developments surrounding the US-Iran negotiations.  

Easing concerns of a potential military conflict between them could weigh on the WTI price in the near term. “There is still scepticism that any reasonable deal can be made with Iran, so even though the market right now is giving talks the benefit of the doubt, we still don’t know what the outcome will be of those talks,” said Phil Flynn, senior analyst with Price Futures Group.

According to the US Energy Information Administration (EIA) weekly report, crude oil stockpiles in the US for the week ending January 30 fell by 3.455 million barrels, compared to a decline of 2.296 million barrels in the previous week. The market consensus was for a decrease of 2 million barrels. The significant drop in crude inventories might help limit the WTI’s losses.