Oil prices climbed on Wednesday, driven by a positive demand outlook in the US, the world’s largest oil consumer. However, talks of a potential cease-fire between Israel and Hamas continued to weigh on prices.
Brent crude, the international benchmark, rose 0.2%, reaching $79.70 per barrel at 09:53 a.m. local time (0653 GMT), up from $79.54 at the previous session’s close.
The US benchmark, West Texas Intermediate (WTI), increased by 0.26%, trading at $76.91 per barrel, compared to its previous close of $76.70.
The American Petroleum Institute (API) reported a decrease in US commercial crude oil inventories for the week ending Jan. 10. API data showed a decline of 2.6 million barrels, falling short of market expectations for a 3.5-million-barrel drop.
The inventory drop suggests strengthening demand in the US, which helped push oil prices higher.
The US Energy Information Administration will release its official inventory data later on Wednesday.
Meanwhile, talks regarding a prisoner swap and cease-fire, facilitated by Qatar, Egypt, and the US, continue to create uncertainty in the market.
Israeli Prime Minister Benjamin Netanyahu said on Tuesday that a deal with Hamas for a prisoner swap could be finalized within “days or hours.” During a meeting with families of Israeli captives in Gaza, Netanyahu emphasized that he is “ready for a prolonged cease-fire” but only if all abductees are returned. He stressed that progress depends on Hamas’s response.
Hamas has indicated that a cease-fire and prisoner swap agreement is in its “final stages.” White House National Security Advisor Jake Sullivan said the Biden administration hopes to finalize the deal this week, though the “implementation and execution” of the deal would fall to the next administration.
Meanwhile, concerns about the impact of policies under the potential leadership of former US President Donald Trump have made investors more cautious. Analysts expect today’s inflation data and the US Federal Reserve’s Beige Book report to influence market movements.
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