Oil prices held at one-month lows, 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 58 cents, or 0.8%, to $71.7 a barrel by 0701 GMT.
US West Texas Intermediate crude futures rose 62 cents, or 0.9%, to $67.83 per barrel.
Prices fell for a second straight session on Tuesday when an Axios reporter said on X that Israeli Prime Minister Benjamin Netanyahu would hold an imminent meeting with several ministers, the heads of the military and intelligence community about talks on a diplomatic solution to the war in Lebanon.
A deal that would end the fighting between Israel and Hezbollah could be achieved within a few weeks, Israeli and US officials said, according to Axios.
“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.
“A ceasefire deal in the Middle East is on the table, which reduces the risks of a wider escalation impacting oil production, while we still have OPEC+ unwinding of production cuts on the horizon,” he added.
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 a total of 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 dipped by 573,000 barrels in the week ended Oct. 25, the sources said on condition of anonymity.
Oil slides 5% after limited Israeli retaliatory attack on Iran
Earlier, nine analysts polled by Reuters had expected a 2.2 million-barrel rise in crude inventories.
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.
“The oil market is likely to trade in choppy sideway range for now as markets participants await for China’s NPC meeting announcement of fresh fiscal stimulus measures and the outcome of the US presidential election,” said senior market analyst Kelvin Wong in an email.
With some bets on Trump having higher odds on winning, it can cap an upside in the oil markets as he favours an increase in oil output from the US, he added.
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