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Oil prices retreated to one-week lows on Thursday, shedding around 2% as geopolitical risk premiums ebbed and bearish US inventory data weighed on sentiment.

Brent settled down $1.18, or 1.8%, at $64.06 a barrel.

WTI fell $1.26, or 2.1%, to $59.36 a barrel. 

The sell-off followed a softening in rhetoric from US President Donald Trump on several key geopolitical flashpoints, including Greenland and Iran, alongside tentative diplomatic signals pointing towards a possible pathway to ending the Russia–Ukraine war.

Trump said he had secured “total and permanent” US access to Greenland through a NATO-linked arrangement, while NATO’s secretary-general emphasised the need for stronger allied commitments to Arctic security in response to Russian and Chinese activity. 

Separately, Ukrainian President Volodymyr Zelenskiy said security guarantees for Ukraine had been finalised following talks with Trump in Davos, although negotiations over territorial issues remain unresolved.

Downside pressure intensified after the latest US inventory report. The Energy Information Administration reported a larger-than-expected crude build of 3.6 million barrels for the week ended 16 January. Gasoline stocks rose to their highest level since 2021, while exports fell by more than 500,000 barrels per day, reinforcing concerns over near-term demand softness.

Written by: Farid Muzaffar