Brent crude futures gained 22 cents, or 0.3%, to $77.4 a barrel and U.S. WTI futures added 14 cents to $73.71 a barrel
Oil prices steadied in Asian trading on Wednesday as traders weighed developments in the Middle East conflict against continued bearish expectations for demand.
Brent crude futures gained 22 cents, or 0.3%, to $77.4 a barrel by 0349 GMT. U.S. WTI futures added 14 cents to $73.71 a barrel.
Prices had plummeted more than 4% in the previous session on a possible ceasefire in the region, but markets remain wary of a potential Israeli strike on Iran’s oil infrastructure.
The everyday dilemma of ‘Middle Eastern headlines’ moving like a pendulum between ‘ceasefire talks’ and ‘further escalation in attacks’ has been distracting investors from reality. Oil markets are twirled in sentiments of ‘buying the rumour’ and sidelining the real fundamentals that should matter, according to Phillip Nova senior market analyst Priyanka Sachdeva.
The sell-off on Tuesday followed a rally that began after Iran launched an attack at Israel on October 1, culminating in an 8% gain on the week on Friday, the biggest in more than a year.
On the demand front, data showed U.S. crude oil stocks rose by almost 11 million barrels last week, according to market sources citing American Petroleum Institute (API) figures on Tuesday. However, fuel stockpiles dropped.
Weak demand continued to underpin the fundamental outlook. The U.S. Energy Information Administration on Tuesday downgraded its 2024 forecast for global oil demand growth by 20,000 bpd, to 103.1 million bpd, because of weaker industrial production and manufacturing growth in the U.S. and China.
Concerns about a lack of further stimulus measures by China to boost its economy also capped oil market gains. Officials offered few new details at a press conference on Tuesday.
China has a part to play as well, with a lack of new stimulus bringing some disappointment. Many market participants were hoping that its fiscal policies will follow in the footstep of the financial ‘bazooka’ delivered in late-September, but there was clearly a step-down in yesterday’s announcement, said IG market strategist Yeap Jun Rong.