London — Oil prices rose slightly on Wednesday, regaining some ground after steady sell-offs driven by expectations of reduced Chinese demand and diminishing concerns over the potential for Middle East conflict to spread and disrupt supply.
Brent crude futures were up 47 cents, or 0.6%, at $77.67 a barrel by 1326 GMT. U.S. West Texas Intermediate crude rose 48 cents, or 0.7%, to $73.65.
Since peaking above $82 on Monday last week, Brent had shed 6.2% of its value by the end of trading on Tuesday, closing at a two-week low of $77.20. WTI fell 7.5% in the same period.
While worries persist over the prospect of economic weakness in China choking demand from the world’s biggest crude importer, inventories in the United States, the world’s biggest oil producer and consumer, are set to rise.
U.S. crude oil stocks were forecast to have risen last week, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline and distillate stocks fell, however, the sources said.
Official U.S. government inventory estimates are set to be released on Wednesday at 10:30 a.m. (1430 GMT).
Meanwhile, U.S. Secretary of State Antony Blinken wrapped up a Middle East trip on which he intended to broker a ceasefire agreement in Gaza.
Blinken and mediators from Egypt and Qatar have raised hopes of a U.S. “bridging proposal” that could shrink the gaps between the two sides in the 10-month war.
“Hopes of a cease-fire between Israel and Hamas have weighed on oil, along with lingering demand concerns,” ING commodities strategists said.
“While weaker Chinese demand has been well reported, refinery margins around the globe have been under pressure for much of August, suggesting that these demand concerns are not isolated to just China.”
China’s economic struggles have contributed to weak processing margins and low fuel demand that has curbed operations at state-run and independent refineries.
Imports of crude oil from Russia fell in July by 7.4% from a year ago while fuel oil imports retreated for a third straight month, customs data showed this week.
*Paul Carsten, Ahmad Ghaddar & Jeslyn Lerh, editing: Barbara Lewis & David Goodman – Reuters
