Oil Steadies as Traders Weigh US Stockpiles and Gaza Talks

(Bloomberg) -- Oil steadied following a short run of declines, as traders monitor weekly stockpile data in the US and Washington continued its push for a cease-fire between Israel and Hamas.

Brent traded above $77 a barrel after losing almost 5% over the previous three sessions, while West Texas Intermediate was near $73.

The American Petroleum Institute reported crude inventories expanded by 347,000 barrels last week, according to people familiar with the figures. Official figures are due later Wednesday.

US Secretary of State Antony Blinken left the Middle East late Tuesday without a cease-fire agreement, but reiterated that Israel had agreed to a “bridging” deal to create space for the two sides to hammer out details. Options markets are signaling an easing of concerns over hostilities in the Middle East.

Crude has given up most of its gains this year as China’s lackluster economy overshadowed OPEC+ supply cutbacks.

Also See: OIL DEMAND MONITOR: Summer Glow Fading as China Drags on Market

Investors are also watching US economic data as lower inflation could lead to an easing of interest rates by the Federal Reserve — a boon to wider energy demand. Fed Chair Jerome Powell is set to speak at the central bank’s symposium in Jackson Hole, Wyoming, later this week.

“The crude market lacks oxygen, struggling for direction,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S.

“US inventory report may offer some support to WTI if we see a continued drop at Cushing,” the US storage hub in Oklahoma, he added. “Otherwise, the weak demand outlook in China and whether or not OPEC+ will increase production remains the key focus, beside Powell’s speech on Friday.”

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