Oil prices steady after falling on potential Israel-Hezbollah ceasefire By Reuters

By Colleen Howe

BEIJING (Reuters) – Oil prices steadied in Asian trade on Wednesday as traders weighed uncertainty surrounding developments in the Middle East conflict against continued bearish fundamentals.

Futures rose 11 cents, or 0.14 percent, to $77.29 a barrel by 0223 GMT. U.S. West Texas Intermediate futures rose 3 cents to $73.60 a barrel.

Prices fell more than 4 percent in the previous session on a possible Hezbollah-Israel ceasefire, but markets remain wary of a potential Israeli attack on Iran’s oil infrastructure.

“We expect further volatility as the market weighs bearish fundamentals against supply risk due to rising tensions in the Middle East,” Macquarie analysts said in a note.

The sell-off in Tuesday’s session followed a rally that began after Iran launched a missile barrage on Israel on Oct. 1, culminating in an 8 percent gain for the week on Friday, the biggest in more than a year.

Hezbollah officials appeared on Tuesday to abandon a Gaza ceasefire as a condition for a cease-fire in Lebanon. Hezbollah’s deputy leader, Naim Qassem, said he supported attempts to secure a truce in a televised speech, the first time an end to the war in Gaza was not mentioned as a precondition.

Taking a view on demand, data showed oil inventories rose by nearly 11 million barrels last week, much more than analysts polled by Reuters had expected, according to market sources citing data from the American Petroleum Institute on Tuesday. . However, fuel stocks have declined.

Weak demand continued to support the fundamental outlook. The US EIA on Tuesday downgraded its 2024 forecast for global oil demand to rise by 20,000 barrels per day (bpd) to 103.1 million bpd due to weaker industrial output and rising production in the US and China .

Hurricane Milton, one of the most intense Atlantic hurricanes on record, is expected to make landfall on Florida’s Gulf Coast on Wednesday, potentially disrupting gasoline supplies to the third-largest U.S. consumer state.

“With some uncertainty about Hurricane Milton’s impact on oil infrastructure and traders still guessing what and when Israel’s response to Iran’s missile attack will come, I suspect we have entered a new trading range higher for now between 72.50 $ and $77.50,” said Tony Sycamore. , market analyst with IG.

Florida, which depends on water-based fuel imports, closed most of its ports to ship traffic on Tuesday, and energy companies shut down some pipelines and shipping terminals in Tampa.