LONDON, Jan 22 (Reuters): Oil prices fell on Thursday, reversing the previous sessions' gains, after US President Donald Trump softened threats against Greenland and Iran, and as investors assessed the supply and demand outlook.
Brent crude was down $1.25 cents, or 1.92 per cent, at $63.99 a barrel at 1301 GMT. West Texas Intermediate for March declined $1.24 cents, or 2.05 per cent, to $59.38 a barrel.
The contracts climbed more than 0.4 per cent on Wednesday following a rise of 1.5 per cent a day earlier, after OPEC+ producer Kazakhstan halted output at its Tengiz and Korolev oilfields due to power distribution issues.
"There is a deflation of risk premium related to the Greenland debacle and Iran supply risk has also been reduced," said Ole Hansen, chief commodity analyst at Saxo Bank.
On Wednesday, Trump ruled out the use of force to acquire Greenland and stepped back from tariff threats aimed at European allies.
Trump also said he hoped there would be no further US military action in Iran, but added the United States would act if Tehran resumed its nuclear programme.
Against the backdrop of Greenland and the receding prospect of action in Iran, oil prices should hold at around $60 a barrel, said Tony Sycamore, an analyst with online broker IG.
Also Wednesday, Trump said he believed "we're reasonably close" to a deal to end the war between Russia and Ukraine, adding he would meet Ukrainian President Volodymyr Zelenskiy later in the day. An end to the war would likely result in the removal of US sanctions on Russia, which would limit supply disruptions and weigh down prices.
The International Energy Agency revised its 2026 global oil demand growth forecasts higher on Wednesday in its latest monthly oil market report, suggesting a slightly narrower surplus this year.
