Oil Prices Hold Steady Ahead of U.S. Inventory Data and Middle East Developments
Oil prices remained largely unchanged on Thursday as investors awaited key U.S. oil inventory data and developments in the ongoing conflict in the Middle East. Additionally, market participants were looking for more clarity on China’s economic stimulus measures.
By 0834 GMT, Brent crude futures were up 25 cents at $74.47 a barrel, while U.S. West Texas Intermediate (WTI) crude futures also gained 25 cents, reaching $70.64 a barrel. The modest uptick comes after both benchmarks saw two consecutive days of declines, with prices hitting their lowest levels since October 2. The drop was driven in part by reduced demand forecasts for 2024 and 2025 from both the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).
Middle East Conflict and U.S. Inventory Data in Focus
Concerns over potential oil supply disruptions due to the conflict between Israel and Iran have eased somewhat, but uncertainty remains. Investors are still watching closely to see how Israel will respond to Iran’s October 1 missile strike.
“The exact nature of Israel’s forthcoming retaliatory measures against Iran is still unclear,” noted John Evans of oil broker PVM. He added that the Middle East conflict could provide enough reason for oil prices to fluctuate in the coming days.
Market participants are also awaiting U.S. oil inventory data, with the Energy Information Administration (EIA) scheduled to release its official report later on Thursday. Preliminary data from the American Petroleum Institute (API) on Wednesday showed a decline in crude and fuel stocks, against expectations for a build. If the EIA report confirms weaker demand, it could add further pressure on oil prices.
Other key data points that could impact the market include U.S. jobless claims figures and a rate decision from the European Central Bank (ECB), both of which are scheduled for release later in the day. The ECB’s decision could lend some support to oil prices if it opts for another rate cut to support economic growth.
Investors are also keenly awaiting more details from China on its plans to revive its economy, which were announced on October 12. Efforts to bolster the struggling property sector and broader economic stimulus measures are expected to play a crucial role in supporting global oil demand.
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