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 U.S. crude inventories.
Oil prices rose on Wednesday after two days of losses as a deadlock in Gaza ceasefire talks renewed uncertainty about the of from the Middle East and offset a bigger-than-expected build in U.S. crude inventories.Brent crude futures were up 70 cents, or 0.8%, at $90.12 per barrel at 1320 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 69 cents, or 0.8%, to $85.92.
"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 U.S. inventories," said Tony Sycamore, a market analyst at IG in Singapore.
Hamas said on Tuesday that an Israeli proposal on a ceasefire in the war in Gaza did not meet the demands of Palestinian militant factions, but it would study the offer further and deliver its response to mediators.
If the conflict continues, it risks the of other countries in the region, particularly Hamas backer Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC).
Meanwhile, U.S. crude 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 U.S. government data is due at 1430 GMT.
Separately, the government raised its forecast for U.S. 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 U.S. 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 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 Israel-Hamas ceasefire discussions in Cairo continued.
The commander of the Revolutionary Guard's navy in Iran said it could close the Strait of Hormuz if deemed necessary. About a fifth of the volume of the world's total oil consumption passes through the strait daily.
Turkey said it would restrict exports of various products, including jet fuel, to Israel until there is a ceasefire in Gaza. Israel said it would respond with its own curbs.
Meanwhile, Fitch cut its outlook on China's sovereign to negative on Wednesday, citing risks to public finances as the economy faces increasing uncertainty in its shift to new growth models.
(Additional reporting by Noah Browning in London and Andrew Hayley in Beijing; editing by Jason Neely and Christina Fincher)
