Crude Oil Drops on Iran Deal Prospects and Inventory Shock
Light crude oil futures plunged over 3% on Thursday, extending losses after a failed test of technical resistance. The downside move was driven by rising expectations of a U.S.-Iran nuclear deal and an unexpected crude inventory build, both weighing heavily on the supply outlook.
At 10:59 GMT, Light Crude Oil Futures are trading $60.99, down $2.16 or -3.42%.
Resistance at $63.06 to $63.70 Holds as Selling Accelerates
Tuesday’s rally stalled at $63.90, precisely where resistance from the pivot at $63.06 and the 50-day moving average at $63.70 converged. The failure to break higher triggered aggressive selling, with prices collapsing below key support levels.
The next technical focus is the minor pivot at $59.60—how traders respond here will shape near-term direction. Bulls may attempt to defend this level to carve out a higher low, while bears are targeting deeper support levels at $55.30 and $54.48 to force out weaker long positions.
U.S.-Iran Nuclear Deal Expectations Weigh on Sentiment
Market pressure intensified after comments from both U.S. and Iranian officials signaled progress toward a nuclear agreement that could ease sanctions on Iranian crude exports.
President Trump noted the U.S. was “very close” to a deal, while Iranian sources indicated willingness to negotiate in exchange for sanctions relief. Traders are factoring in the potential return of sanctioned Iranian barrels to an already fragile supply-demand balance.
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See all Brent Oil forecastsEIA Inventory Data Surprises to the Upside
Compounding bearish sentiment, the latest Energy Information Administration (EIA) report showed U.S. crude stockpiles rose by 3.5 million barrels last week, a sharp contrast to expectations for a 1.1 million-barrel draw.
Total inventories now stand at 441.8 million barrels, signaling weakening demand or stronger-than-anticipated supply flows. The inventory build was another catalyst that accelerated Thursday’s sell-off, according to PVM Oil analyst John Evans.
OPEC and IEA Diverge on Supply and Demand Signals
Adding further complexity, the International Energy Agency (IEA) revised its 2025 oil demand growth forecast upward by 20,000 bpd to 740,000 bpd, citing robust economic activity and price-driven consumption support.
Meanwhile, OPEC acknowledged a weaker outlook for supply growth from non-OPEC+ producers, even as the broader OPEC+ alliance continues to raise output. This divergence highlights the uncertain path ahead for balancing the market.
Bearish Outlook as Supply Risks Increase
With inventory builds, diplomatic progress with Iran, and rising OPEC+ output, the fundamental tone has turned decisively bearish. Unless the $59.60 pivot holds, further downside toward the $55 range appears likely.
Traders should monitor U.S.-Iran negotiations and weekly inventory trends closely, as both could define short-term direction for crude oil prices.
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