Oil rises as Middle East worries offset US crude stock build
Oil prices rose on Wednesday after two days of losses as a deadlock in Gaza ceasefire talks renewed uncertainty about the security of supply from the Middle East and offset a bigger-than-expected build in US crude inventories.
Brent crude futures were up 30 cents, or 0.3%, at $89.72 per barrel at 10:10 GMT, while US West Texas Intermediate (WTI) crude futures rose 29 cents, or 0.3%, to $85.52.
“Some of the heat has come out of the rally in crude oil in the early part of this week on hopes of a ceasefire in Gaza and higher US inventories,” said Tony Sycamore, a market analyst at IG in Singapore.
Meanwhile, US crude stocks climbed last week by 3.03 million barrels, according to market sources citing American Petroleum Institute figures. That topped a rise by about 2.4 million barrels expected by analysts. Official US government inventory data is due at 14:30 GMT.
Separately, the government raised its forecast for US crude oil output, expecting an increase of 280,000 bpd to 13.21 million bpd in 2024, up 20,000 bpd from an earlier forecast from the US Energy Information Administration (EIA).
The EIA said it expects Brent crude prices to average $88.55 a barrel in 2024, up from a previous forecast of $87, and it upgraded its demand growth forecast for the past two years.
“Broadly it reconfirmed an oil market outlook with Opec+ in good control of the oil market,” SEB analyst Bjarne Schieldrop said. On Tuesday, both Brent and WTI fell more than 1%, as Israelhamas ceasefire discussions in Cairo continued.