- Brent crude fell below $95 per barrel after a nearly 9% drop the previous session
- US-Iran conflict de-escalation hopes rose after Democrats' strong midterm election gains
- Brent crude futures traded at $94.50, WTI crude near $88 per barrel on Thursday
Oil prices continued to decline on Thursday, with Brent crude hovering below the $95-per-barrel mark after plunging nearly 9% in the previous session to hit a two-month low.
Growing hopes of a possible de-escalation in the US-Iran conflict, following the Democratic Party's strong performance in the US midterm elections, have eased concerns over global oil supplies.
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Brent crude futures were last trading 0.14% lower at $94.50 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude was trading around $88 per barrel, after settling 8.3% lower at $88.12 on Wednesday. Brent crude had shed 8.7% to settle at $94.62 in the previous session.
The international oil benchmark has fallen nearly 16% so far this week, as expectations of mounting political pressure on US President Donald Trump to end the conflict with Iran weighed on crude prices.
READ | Wall Street Futures Shrug Off Democrats' Sweep. What's The 44-Year Midterm Streak Giving Bulls Hope?
The sharp sell-off followed comments from US Vice President JD Vance, who attributed Republican losses in Tuesday's midterm elections to the war with Iran. "The reason we lost is the war," Vance said in a social media post on Wednesday, adding that Trump himself had acknowledged the conflict as a major factor.
Democrats swept the House and Senate in the elections, giving the party greater leverage to pressure the Trump administration to end the unpopular conflict, which has driven up gasoline and diesel prices.
Market participants believe the election outcome could push Washington towards a diplomatic settlement.
Trump told the Financial Times on Tuesday that he had no immediate plans to launch fresh strikes against Iran. This comes after oil markets had priced in the possibility of a major escalation following the elections, with crude prices gaining more than 10% in October.
Oil Prices: Escalation Risks Still Remain
Despite the sharp correction, analysts believe the risk of further escalation in the US-Iran conflict has not disappeared. The conflict has disrupted global energy supplies for nearly eight months, keeping geopolitical risks firmly on the oil market's radar.
However, indications from senior US and Iranian officials that they are open to a diplomatic settlement have eased some of the immediate supply concerns. Meanwhile, crude exports from the Persian Gulf have begun recovering, with supplies exceeding near-term demand.
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