Oil prices held steady near one-month lows on Wednesday, after sliding in the previous two sessions, as markets weighed a potential ceasefire between Israel and Hezbollah and rising OPEC+ crude supplies against a possible drop in US fuel stocks and demand concerns.
Brent crude futures gained 38 cents, or 0.5%, to $71.50 a barrel by 0957 GMT.
US West Texas Intermediate crude futures edged up 35 cents, or 0.5%, to $67.56 per barrel.
Prices on Tuesday fell for a second straight session when an Axios reporter said on X that Israeli Prime Minister Benjamin Netanyahu would hold a meeting with several ministers, the heads of the military and intelligence community about talks on a diplomatic solution to the war in Lebanon.
The push for a ceasefire for Lebanon comes days before the US presidential election and in parallel with a similar diplomatic drive on Gaza.
“A hefty plunge in oil prices since the start of the week may call for an attempt to stabilise in today’s session, but overall gains remain limited, given the lack of bullish catalysts to drive a more sustained up move,” said IG market strategist Yeap Jun Rong in an email.
Traders also weighed the prospect of OPEC+ increasing production into a soft market amid reports of draws in US inventories, Panmure Liberum analyst Ashley Kelty wrote in a note.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies such as Russia, is scheduled to raise output by 180,000 barrels per day in December.
The group has cut output by 5.86 million bpd, equivalent to about 5.7% of global oil demand. Meanwhile, US crude oil and fuel stocks fell last week, market sources said on Tuesday, citing American Petroleum Institute figures.
Crude stocks fell by 573,000 barrels in the week ended Oct. 25, the sources said. Earlier, nine analysts polled by Reuters had expected a 2.2 million-barrel rise in crude inventories.
Oil slides 5% after limited Israeli retaliatory attack on Iran
Official US government data is scheduled to be released later on Wednesday.
Markets were also focused on the demand uncertainty from China, pending fresh stimulus measures from the government, and the results of the US election.
China is considering approving next week the issuance of over 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy, said two sources with knowledge of the matter.
Comments