Risk-Off Sentiment in Asset Markets Weighs on Crude Oil Prices

Core Insights - Crude oil and gasoline prices experienced a significant decline, with WTI crude oil down 2.77% and RBOB gasoline down 3.18%, attributed to easing US-Iran tensions and a risk-off sentiment in asset markets [1][2] Geopolitical Factors - Easing geopolitical risks between the US and Iran have contributed to lower crude prices, as President Trump expressed a preference for a nuclear deal [2] - The US is considering military actions in the Middle East, including seizing Iranian oil tankers and deploying additional naval forces, which could impact oil supply and prices if tensions escalate [3] Supply Dynamics - There is a notable increase in crude supplies in floating storage, with approximately 290 million barrels of Russian and Iranian crude currently stored, representing over a 50% increase from the previous year [2] - Venezuelan crude exports have risen significantly, from 498,000 barrels per day (bpd) in December to 800,000 bpd in January, further contributing to global oil supply and bearish price pressures [4] Market Sentiment - The ongoing conflict in Ukraine continues to support oil prices due to restrictions on Russian crude, as the Kremlin indicates no resolution is in sight, maintaining a risk premium in the market [5]