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Oil rates rise due to stronger demand outlook in US
(MENAFN) Oil prices saw a modest increase on Wednesday, primarily driven by a stronger demand outlook in the US, the world’s largest consumer of oil. However, reports indicating a potential cease-fire agreement between Israel and Hamas continued to exert downward pressure on prices. By 9:53 am local time (0653 GMT), the international benchmark Brent crude had risen by 0.2 percent, trading at USD79.70 per barrel, up slightly from the previous session’s close of USD79.54. Similarly, the US benchmark West Texas Intermediate (WTI) climbed 0.26 percent, reaching USD76.91 per barrel, compared to the prior close of USD76.70.
A key factor behind the price rise was the latest data from the American Petroleum Institute (API), which reported a drawdown in US commercial crude oil inventories for the week ending January 10. Stocks fell by 2.6 million barrels, although this figure was lower than the market expectation of a 3.5 million barrel drop. This decline suggests stronger demand in the US, contributing to the upward movement in oil prices.
The US Energy Information Administration is expected to release official inventory data later on Wednesday, which could provide further insights into the state of the US oil market. Meanwhile, the ongoing negotiations over a potential prisoner swap and cease-fire between Israel and Hamas, facilitated by Qatar, Egypt, and the US, were weighing on oil prices. These talks introduced uncertainty into the market, as the possibility of reduced geopolitical tensions could influence oil supply dynamics.
Israeli Prime Minister Benjamin Netanyahu remarked on Tuesday that a deal with Hamas concerning a prisoner swap could be finalized imminently, with talks expected to wrap up in “days or hours.” Netanyahu expressed his willingness to accept a prolonged cease-fire, contingent on the return of all abducted Israeli citizens. The prospect of peace talks and a potential cease-fire continued to contribute to the volatility of oil prices, as markets monitored developments closely.
A key factor behind the price rise was the latest data from the American Petroleum Institute (API), which reported a drawdown in US commercial crude oil inventories for the week ending January 10. Stocks fell by 2.6 million barrels, although this figure was lower than the market expectation of a 3.5 million barrel drop. This decline suggests stronger demand in the US, contributing to the upward movement in oil prices.
The US Energy Information Administration is expected to release official inventory data later on Wednesday, which could provide further insights into the state of the US oil market. Meanwhile, the ongoing negotiations over a potential prisoner swap and cease-fire between Israel and Hamas, facilitated by Qatar, Egypt, and the US, were weighing on oil prices. These talks introduced uncertainty into the market, as the possibility of reduced geopolitical tensions could influence oil supply dynamics.
Israeli Prime Minister Benjamin Netanyahu remarked on Tuesday that a deal with Hamas concerning a prisoner swap could be finalized imminently, with talks expected to wrap up in “days or hours.” Netanyahu expressed his willingness to accept a prolonged cease-fire, contingent on the return of all abducted Israeli citizens. The prospect of peace talks and a potential cease-fire continued to contribute to the volatility of oil prices, as markets monitored developments closely.
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