Oil prices stabilise amid Middle-East uncertainty
Asian trading on Wednesday saw oil prices stabilize as traders weighed concerns about the ongoing conflict in the Middle East against bearish market fundamentals.
At 0223 GMT, Brent crude futures rose by 11 cents, or 0.14%, to reach $77.29 a barrel, while U.S. West Texas Intermediate futures increased by 3 cents to $73.60 a barrel, as reported by Reuters.
Prices had previously dropped by more than 4% in the prior session due to speculation about a potential ceasefire between Hezbollah and Israel.
There is cautiousness in the market about the possibility of an Israeli strike on Iran’s oil infrastructure.
Macquarie analysts noted, “We anticipate additional volatility as the market weighs bearish fundamentals against supply risk due to rising Middle East tensions.”
The sell-off on Tuesday followed a rally that began after Iran's missile attack on Israel on October 1, resulting in an 8% gain for the week by Friday, marking the largest increase in over a year.
Data showed that U.S. crude oil stocks rose by nearly 11 million barrels last week, significantly surpassing analysts’ expectations, according to sources citing American Petroleum Institute figures on Tuesday.
Weak demand trends continue to impact the fundamental outlook. The U.S. Energy Information Administration revised its 2024 forecast for global oil demand growth down by 20,000 barrels per day (bpd) to 103.1 million bpd, attributing the adjustment to weaker industrial production and manufacturing growth in both the U.S. and China.
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