Oil prices eased in Asian trade on Thursday, following gains of 3% in the previous session, as a surprise rise in domestic crude stockpiles weighed on sentiment.
By 2:30 pm AEST (4:30 am GMT) Brent crude futures slipped $0.50 or 0.7% to US$68.61 per barrel, while U.S. West Texas Intermediate (WTI) crude also lost $0.47 or 0.7% to $66.98 per barrel.
The latest data from the U.S. Energy Information Administration (EIA) showed that crude inventories rose by 3.8 million barrels last week to 419 million barrels - defying market expectations for a 2 million-barrel drawdown.
Despite the softening demand picture, oil prices had surged on Wednesday after Iran announced it would suspend cooperation with the U.N. nuclear watchdog.
The development raised concerns that the ongoing dispute over Tehran’s nuclear program could escalate and potentially disrupt oil supply from the region.
ANZ analysts wrote in a note to clients: "Brent crude oil rose more than 3% as investors priced in tentative optimism that more deals will be reached ahead of the 9 July deadline.
"This helped offset signs of waning demand in the US. Growth in U.S. supply is likely to fall further, according to a Federal Reserve Bank of Dallas survey.
"US shale executive expects to drill fewer wells this year than planned due to lower oil prices and uncertainty surrounding tariffs."
Supporting broader market sentiment was the U.S.-Vietnam trade agreement announced Wednesday by President Donald Trump.
The deal imposes a 20% tariff on many Vietnamese exports but was welcomed by markets as a sign of progress toward global trade stability.
