Oil prices fell after a report from a US industry group indicated a slight increase in US crude inventories, while the Biden administration renewed efforts to reach a ceasefire in the Middle East, which could ease tensions.
Brent crude fell below $76 a barrel after two days of gains of more than 4%, while West Texas Intermediate crude slipped toward $71. The American Petroleum Institute estimated inventories rose by 1.6 million barrels last week, according to people familiar with the figures. Official data is due later Wednesday.
In the Middle East, US Secretary of State Antony Blinken and Israeli Prime Minister Benjamin Netanyahu agreed that the recent killing of Hamas leader Yahya Sinwar opened new prospects for ending the conflict in Gaza. However, traders are waiting to see how Israel will respond to Iran after the missile strike earlier this month.
Oil prices have been volatile in October, adding to the volatility as tensions in the Middle East raised concerns about supply disruptions from a region that accounts for about a third of global output. In Asia, China, the world’s biggest oil importer, has rolled out a series of stimulus measures to combat an economic slowdown that could support energy demand, but there are doubts about the effectiveness of the measures.
The crude oil market still reflects a geopolitical risk premium, and if these risks are removed, investors' attention will shift to weak fundamentals, said Gao Jian, an analyst at Kitchen Futures.
