Oil prices steady as China stimulus hopes fade, US crude stocks fall By Reuters

By Laila Kearney

(Reuters) – Oil prices steadied on Wednesday after rising in the previous session as enthusiasm waned for economic stimulus from China, the world’s biggest crude importer, although an industry report showing declines and inventories fuels supported the market.

futures gained 3 cents to $75.20 a barrel by 0004 GMT. U.S. West Texas Intermediate crude lost 2 cents to $71.58 a barrel.

Prices rose about 1.7 percent on Tuesday after China announced its most aggressive economic stimulus since the COVID-19 pandemic, with interest rate cuts and government funding.

But analysts warned that more fiscal aid was needed to boost confidence in the world’s second-largest economy, which dampened the initial impact on oil prices from the announcement.

However, lower U.S. crude and fuel stockpiles provided some support to the market, which has been broadly higher since prices hit their lowest since 2021 on Sept. 10.

U.S. crude inventories fell by 4.34 million barrels last week, while gasoline stocks fell by 3.44 million barrels and distillate inventories fell by 1.12 million barrels, sources said. from the market citing the American Petroleum Institute figures on Tuesday.

An intensifying conflict in the Middle East between Iran-backed Hezbollah in Lebanon and Israel also supported crude oil prices, with cross-border missile launches by both sides raising fears of war spreading to the key producing region.

Hezbollah confirmed on Wednesday that its top commander Ibrahim Qubaisi was killed by Israeli airstrikes on the Lebanese capital, as Israel announced earlier. Israel said Qubaisi heads the group’s rocket and missile force.

A hurricane threatening the US Gulf Coast has changed course towards Florida and away from nearby oil and gas producing areas in Texas, Louisiana and Mississippi.