Oil prices fell more than $1 a barrel on Thursday 12 November as easing concerns about an escalation of conflict in the Middle East reduced the risk premium in crude markets, while rising output and growing US inventories fed worries about oversupply.

Brent futures were down $1.47, or 1.58%, to $91.29 a barrel by 0426 GMT, according to Reuters. US West Texas Intermediate crude futures slipped $1.24, or 1.43%, to $85.29. The declines reversed Wednesday’s gains, when Brent rose 1.4% and WTI added 0.6%, after both benchmarks hit two-month lows the previous day.

Peace talks and rising supply weigh on prices

Russian and Ukrainian negotiators agreed 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.

“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.

Adding to the bearish sentiment, OPEC+ crude production rose in October, driven by higher Saudi Arabian output despite ongoing shipping disruptions through the Strait of Hormuz. 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 was due later on Thursday, delayed a day by a US national holiday on Wednesday.