Oil prices extended losses in Asian trading on Thursday after data showed a surprise build in U.S. crude stockpiles, while uncertainty ahead of renewed U.S.-Iran nuclear talks next week further fueled oversupply worries.

In the previous session, oil closed lower after volatile moves, as it initially jumped over 1.5% on a CNN report stating Israel may potentially strike Iran's nuclear sites.

As of 20:48 ET (01:55 GMT), Brent Oil Futures expiring in July fell 0.5% to $64.61 per barrel, while West Texas Intermediate (WTI) crude futures fell 0.4% to $61.30 per barrel.

US-Iran talks to continue next week; oversupply worries persist
The fifth round of nuclear negotiations between Iran and the United States is scheduled for Friday, May 23, in Rome, with Oman continuing its role as mediator.

A central point of contention remains Iran's uranium enrichment activities. While the U.S. demands a complete halt to enrichment, Iran insists on its right to enrich uranium for peaceful purposes.

If the negotiations make progress or lead to an easing of U.S. sanctions, Iran could increase its crude oil exports. Currently, Iran is exporting oil at reduced levels due to sanctions, but it holds significant capacity as it is the third-largest producer among OPEC members

This comes at a time when the OPEC+ cartel members have already hiked production starting this month, further underscoring a supply surplus scenario.

Oil prices had risen sharply in early trade on Wednesday after CNN reported that Israel is preparing for a potential military strike on Iranian nuclear facilities.

The report said that the Israeli leaders have not made a final decision yet, but the likelihood of an Israeli strike has "gone up significantly" in recent months.

US crude inventories jump unexpectedly - EIA
U.S. crude oil inventories unexpectedly increased for the week ending May 16, 2025, raising concerns about oversupply and contributing to a decline in oil prices.

The Energy Information Administration (EIA) reported a 1.3 million-barrel rise in crude stockpiles, bringing total inventories to 443.2 million barrels. This build defied analyst expectations of a 1.3 million-barrel drawdown.

Additionally, gasoline and distillate inventories increased by 816,000 and 580,000 barrels, respectively, amid weakening demand indicators.

A day earlier, the American Petroleum Institute (API) had also reported an unexpected build of 2.5 million barrels in U.S. crude inventories.

While the start of the U.S. summer driving season after Memorial Day may boost demand and help draw down inventories, recent forecasts and datapoints indicate supply outpacing demand.

Source: Investing.com