Oil falls on the back of data from the US, but the market is watching the Middle East
Kyiv • UNN
Brent and WTI crude oil futures fell by 1.8-2% due to a larger-than-expected increase in US stockpiles. The market remains tense due to the conflict in the Middle East and expectations of Israel's response to Iran's attack.
Oil prices fell on Wednesday after industry data showed that US crude stockpiles rose more than expected, although futures were still showing a rise of about 2% this week, as traders took into account the conflict in the Middle East, UNN writes with reference to Reuters.
Details
Futures for Brent crude oil fell $1.40, or 1.8%, to $74.64 per barrel at 14:07 Kyiv time. Futures for WTI also fell by $1.40, or 2%, to $70.34.
Oil had been rising in price over the previous two sessions, cutting last week's losses by more than 7%. These declines were driven by concerns about Chinese demand and some easing of fears of oil supply disruptions in the Middle East.
Wednesday's drop in prices came after data showed that US oil inventories rose by 1.64 million barrels last week, according to market sources citing data from the American Petroleum Institute on Tuesday. Analysts polled by Reuters had expected an increase of 300 thousand barrels.
However, the impact of inventories on prices was somewhat offset by concerns about the potential risk to oil supplies from the conflict in the Middle East.
"The market continues to wait for Israel's response to Iran's missile attack," ING analysts said on Wednesday, adding that Tuesday's high prices may have been due to the lack of any results from US Secretary of State Anthony Blinken's recent visit to Israel.
On Wednesday, Blinken insisted on a cessation of hostilities between Israel and Hamas and Hezbollah, but massive Israeli airstrikes on a major historic Lebanese port city showed that there will be no respite, the newspaper notes.
On Tuesday, Israel also confirmed that it had killed Hashem Safiyeddine, the successor to the late Hezbollah leader Hassan Nasrallah, who was killed last month in an Israeli attack on the Iranian-backed Lebanese paramilitary group.
"Market participants were expecting the conflict in the Middle East to drag on longer, and the ceasefire agreement could reach a deadlock," said IG market strategist Yeap Jun Rong.
