Investing.com-- Oil prices slumped nearly 3% in Asian trading on Thursday, snapping a five-day winning streak as U.S. President Donald Trump indicated a more restrained stance on Iran, easing fears of near-term supply disruptions.
Brent Oil Futures expiring in March plunged 2.8% to $64.67 per barrel by 20:25 ET (01:25 GMT), while West Texas Intermediate (WTI) crude futures also dropped 3% to $60.22 per barrel.
Prices surged more than 10% in the last five sessions, reaching multi-month highs on concerns that unrest in Iran could trigger U.S. military action and disrupt production or shipping.
Trump tempers stance on Iran tensions
Trump said on Wednesday he had been assured that Iranian authorities would stop killing protesters and that he believed there was currently no plan for large-scale executions, easing concerns that Washington was preparing an immediate military response to demonstrations against the government of Supreme Leader Ayatollah Ali Khamenei.
The remarks reduced the risk premium that had built into oil prices on fears of escalation involving one of OPEC's largest producers.
Iranian tensions had underpinned oil's recent rally, with markets focused on the potential for disruptions to crude output or key shipping lanes if unrest intensified or U.S. intervention followed.
Trump flags positive talks with Venezuela
Adding to downward pressure, Trump also signalled closer engagement with Venezuela, another major oil producer under U.S. sanctions.
The U.S. president said he spoke earlier on Thursday with Venezuela's interim leader, Delcy Rodríguez, describing the call as very positive. Trump said discussions covered "oil, minerals, trade and, of course, national security," adding that "we are making tremendous progress as we help Venezuela stabilize and recover."
Market participants said the prospect of improved U.S.-Venezuela ties raised expectations that Venezuelan crude exports could increase over time, further easing global supply concerns.
US crude stockpiles jumped unexpectedly last week - EIA
Beyond geopolitics, traders were also watching signs of rising inventories in the U.S.
Data from the U.S. Energy Information Administration showed crude inventories rose by 3.4 million barrels last week, in contrast to analysts' expectations for a 1.7 million-barrel draw.
Gasoline stocks climbed by 9 million barrels, while distillate inventories were nearly flat as domestic refining activity and imports jumped.
The larger-than-expected builds underscored ample supply in the world's largest oil consumer and dampened near-term bullish sentiment.