NEW YORK: Oil prices fell about 3% to a seven-week low on Wednesday on a surprise build in US crude stocks, the prospect of a Middle East ceasefire agreement and persistent US inflation dampening the expected pace of interest rate cuts and oil demand growth.

Brent futures fell $2.52, or 2.9%, to $83.81 a barrel by 12:23 p.m. EDT (1623 GMT), while US West Texas Intermediate (WTI) crude fell $2.58, or 2.1%, to $79.35.

That put both benchmarks on track to close at their lowest levels since March 12 and also pushed both into technically oversold territory for the first time since December 2023.

In other energy markets, US diesel futures were on track to close at their lowest since July 2023, while US gasoline was on track to drop to a seven-week low.

The US Energy Information Administration (EIA) said energy firms added a surprising 7.3 million barrels of crude into stockpiles during the week ended April 26.

That compares with the 1.1 million barrel withdrawal analysts forecast in a Reuters poll and the 4.9 million barrel increase shown in data from the American Petroleum Institute (API), an industry group.

“The crude build is a big one. At this time of year, we should be drawing down on crude oil as more barrels go through the refinery,” Bob Yawger, director of energy futures at Mizuho, told Reuters.

In addition to the increase in crude stockpiles, EIA also reported a surprising 0.3-million barrel build in gasoline inventories. Analysts expected gasoline stocks would decline by 1.1 million barrels.

In the Middle East, expectations that a ceasefire agreement between Israel and Hamas could be in sight have grown following a renewed push by the United States and Egypt, even as Israeli Prime Minister Benjamin Netanyahu has vowed to go ahead with a long-promised assault on Rafah.