Oil Prices Fall for Fourth Day on Easing Geopolitical Concerns and Surge in US Inventories

Oil prices continued their decline for the fourth consecutive session early Thursday, with geopolitical tensions easing and a rise in US inventories suggesting weaker demand.

The decrease in oil prices is partly due to the reduction of a risk premium that had been in place since early April following an Israeli attack on Iran's embassy in Syria. Despite Iran's retaliation over the weekend with a significant drone and missile attack on Israel, the damage was minimal, and Israel's lack of further retaliation has alleviated concerns of a broader Middle East conflict.

Adding to the downward pressure, a report from the Energy Information Administration on Wednesday indicated a larger-than-expected increase in US oil inventories by 2.7 million barrels, raising concerns about diminishing demand. However, renewed US sanctions on Venezuelan oil exports provided some support to oil prices, as the Biden Administration intensified restrictions in response to ongoing political suppression by the Maduro government.