West Texas Intermediate (WTI) crude fell 5% to below $99 per barrel on Wednesday.
President Donald Trump stated a deal to end the three-month Iran conflict is in its final stages. He indicated an official announcement could occur within hours.
Prospects of Middle East de-escalation and restored Iranian oil supplies drove the market sell-off. These geopolitical developments overshadowed a bullish weekly report from the Energy Information Administration (EIA).
The EIA report showed a larger-than-expected drop in U.S. crude inventories. The negative market reaction despite the inventory draw highlights the significance of the potential peace deal.