Oil Steadies With Gaza Peace Plan and US Inventories in Focus
Oil steadied as traders focused on cooling tensions in the Middle East and higher US inventories.
Brent was near $66 a barrel after rising more than 1% on Wednesday, while West Texas Intermediate was above $62. Israel and Hamas earlier agreed terms for the release of all hostages held by the militant group in Gaza, a major breakthrough in the US- and Qatari-brokered talks to end the two-year war.
Elsewhere, US nationwide crude stockpiles expanded for a second week, although they remained near seasonal lows, according to official data released on Wednesday. Still, levels at the Cushing, Oklahoma, storage hub declined, as did inventories of refined products.
Oil Retreats With Focus on Gaza, US StockpilesFutures remain under pressure amid concerns of oversupplied market
After a dip lower at the start of the month, crude has edged back toward the $65-to-$70 band in which it traded for weeks at the end of the summer. The Organization of the Petroleum Exporting Countries and its allies are ramping up supplies, but so far the impact on prices has been limited by China hoarding barrels into its inventories.
Many Wall Street banks and other observers including the International Energy Agency have predicted that the market will see a major surplus in the coming months. Among them, Goldman Sachs Group Inc. expects Brent to average $56 a barrel next year as global production runs ahead of demand.
While consensus remains bearish given expectations for a surplus, “conviction differs on the depth of downside,” Citigroup Inc. analysts including Francesco Martoccia said in a note. Slower non-OPEC+ growth and greater OPEC+ optionality, along with geopolitical risks looming for large producers such as Russia and Iran, could temper the pace of price adjustment, they said.
Brent for December settlement steadied at $66.41 a barrel at 10:37 a.m. in London.
WTI for November delivery traded little changed at $62.41 a barrel.
Source : Bloomberg
