Oil prices edged lower on Thursday from the previous session’s seven-week high as investors took profits and broader market weakness pressured commodities.
Brent crude oil, against which Nigerian crude oil is priced, slipped 24 cents or 0.35% to $69.07 per barrel by 11:10 a.m., while U.S. West Texas Intermediate (WTI) crude fell 31 cents or 0.48%, to $64.68.
Both benchmarks had gained about 2.5% on Wednesday, supported by a surprise drop in U.S. crude inventories and geopolitical risks tied to Ukraine’s attacks on Russia’s energy infrastructure.
Analysts noted that weakness in U.S. equities contributed to the pullback, with investors adopting a risk-off stance.
Giovanni Staunovo, commodity analyst at UBS, said two consecutive down days for U.S. equities pressured oil prices further, while comments from U.S. Federal Reserve Chair Jerome Powell on stretched equity valuations also spooked markets.
Prices also faced downward pressure from supply-side expectations. Oil flows from Iraqi Kurdistan are expected to resume in coming days after eight oil companies reached an agreement with Iraq’s federal and Kurdish regional governments.
The return of these supplies has revived oversupply concerns at a time when peak seasonal demand is tapering off.
Priyanka Sachdeva, senior market analyst at Phillip Nova, noted that the return of Kurdish supplies adds back fears of an oversupply narrative, propelling a pullback in prices that hover near a seven-week high.
Investor caution is also being reinforced by weaker demand signals. J.P. Morgan analysts observed that U.S. gasoline demand has started to retreat, reflecting broader moderation in travel activity.
Haitong Securities added that prices have yet to fully reflect expectations of mounting oversupply.
Despite the pullback, geopolitical risks and inventory dynamics remain key factors shaping market direction in the short term.