Oil prices steadied after two days of declines, amid prospects of an easing of hostilities in the Middle East and a shift in market attention to global supply balances and OPEC+ production forecasts.
Brent crude traded above $71 a barrel after falling more than 6% in the previous two sessions, while WTI crude approached $67. Israel appeared to be taking steps to end its war with Hezbollah by the end of the year, having avoided a retaliatory strike on Iran’s oil and nuclear facilities.
The fading Middle East war premium has put renewed focus on weak market fundamentals, including slowing Chinese demand and ample global supply. Markets are awaiting OPEC+ plans to gradually restore oil production from December, with expectations differing on whether the alliance will go ahead with the plans.
Commodity and financial markets are bracing for two crucial events next week: the US election and a meeting of China’s top legislature, as investors look for further stimulus to revive the economy. The Asian country is the world’s largest importer of crude oil.
Meanwhile, U.S. crude oil inventories fell by 600,000 barrels last week, the industry-funded American Petroleum Institute reported, according to a document seen by Bloomberg, while gasoline and distillate stocks also fell.
