Midday trading saw West Texas Intermediate (WTI) for March delivery slide nearly $2 to $63.16 per barrel, while Brent crude followed suit, dropping to $67.44. This reversal erased gains from Wednesday, which had been driven by reports that the diplomatic channel might collapse. Refined products followed the downward trend, with RBOB gasoline and ultra-low sulfur diesel futures posting significant declines across front-month contracts.

Diplomatic Shifts and Market Reactions

The primary catalyst for the sell-off is the confirmation of Friday’s talks in Oman. Market volatility spiked earlier in the week following reports that the meeting was at risk of cancellation, but officials from both nations have since stabilized expectations by confirming the Muscat summit will proceed as planned. This diplomatic progress has effectively removed the immediate risk premium that had supported prices during the previous session.

Beyond diplomacy, traders are digesting the latest Energy Information Administration (EIA) data. While crude stockpiles fell by 3.5 million barrels last week, the report indicates the decline was largely attributed to temporary storm-related production halts rather than a fundamental shift in consumption. Analysts at Tradu suggest that, barring a major supply shock, global output is projected to outpace demand, leaving the market susceptible to further price corrections.