Oil Prices Steady As Libya Supply Concerns Ease, US Inventories Shrink By Investing.com

Investing.com– Oil prices steadied in Asian trade on Thursday, after sharp losses in the previous session, on signs of a potential increase in Libyan production.

But prices enjoyed strong gains this week, especially after top importer China announced a series of stimulus measures aimed at supporting growth. U.S. oil inventories also fell more than expected, presenting a tight outlook for markets.

U.S. crude that expires in November rose 0.1 percent to $73.51 a barrel, while it rose 0.1 percent to $69.73 a barrel by 8:57 p.m. ET (00:57 GMT).

Both contracts fell 2 percent on Wednesday but have made strong gains over the past two weeks as they rebounded from near three-year lows.

Oil was boosted by escalating tensions in the Middle East as Israel continued its offensive against Hamas and Hezbollah. A bumper interest rate cut by the Federal Reserve also boosted sentiment toward oil demand.

Libya is making progress towards resuming production

Oil prices fell sharply on Wednesday after reports said delegates from Libya’s eastern and western factions had agreed on the process of appointing a new central bank governor – a move expected to resolve a crisis that has stalled most the country’s oil production.

The country’s production outage has taken at least 1 million barrels per day of production offline, with any resumption of production likely to herald less tight markets.

US inventories shrink more than expected

Oil prices fell broadly, with earlier data showing a substantially larger-than-expected draw of 4.47 million barrels (mb).

and inventories declined, indicating that US demand remained strong.

The draw came amid disruptions in US oil production, particularly due to adverse weather conditions in the Gulf of Mexico. Production in the region was shut down by a hurricane in early September and is expected to face further disruption as Hurricane Helene moves through the Gulf this week.