Oil prices experienced a slight increase on Wednesday, recovering some ground after a series of sell-offs triggered by expectations of reduced demand from China and easing concerns over potential disruptions in Middle East supply chains.
Brent crude futures rose by 47 cents (0.6%) to $77.67 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 48 cents (0.7%) to reach $73.65. Following a peak above $82 the previous week, Brent had lost 6.2% of its value, closing at a two-week low of $77.20 on Tuesday. WTI saw a decline of 7.5% during the same period.
Concerns about economic weakness in China, the world’s largest crude importer, continue to loom over the market. Meanwhile, U.S. crude oil inventories are expected to rise, with forecasts indicating an increase in stocks based on American Petroleum Institute figures.
While gasoline and distillate stocks reportedly fell, U.S. Secretary of State Antony Blinken concluded a Middle East trip aimed at brokering a ceasefire agreement in Gaza, which has contributed to hopes of stability in the region.
ING commodities strategists noted that ongoing hopes for a ceasefire between Israel and Hamas, combined with persistent demand concerns, have impacted oil prices. Weaker refinery margins globally have also suggested that demand issues extend beyond just China.
Additionally, recent customs data revealed a 7.4% decline in crude oil imports from Russia in July compared to the previous year, with fuel oil imports decreasing for the third consecutive month.