FILE PHOTO: A 3D-printed oil pump jack is seen in front of displayed OPEC logo in this illustration picture. REUTERS/Dado Ruvic
OIL prices dipped on Wednesday after inflation in top crude importer China came in weaker than expected, while traders weighed the rising possibility of a ceasefire deal in Gaza as negotiations are set to resume later in the day.
Brent futures were down 27 cents, or 0.3%, at $84.39 a barrel, as of 0515 GMT, after falling 1.3% in the previous session.
U.S. West Texas Intermediate (WTI) crude was down 20 cents, or 0.25%, to $81.21 a barrel, after falling 1.1% in the previous session.
Both the contracts lost about 3% in the previous three sessions on signs that the Texas energy industry came off relatively unscathed from Hurricane Beryl after it lashed the region on Monday.
Oil and gas companies restarted some operations on Tuesday. Some ports reopened and most producers and facilities were ramping up output, although some facilities sustained damage and power had not been fully restored yet.
"Expectations for easing tensions in the Middle East and Chinese weaker-than-expected CPI data for June pressed on oil prices today," said independent market analyst Tina Teng, referring to China's June consumer price index data.
Consumer prices in the world's second-largest economy grew for a fifth month in June, but missed expectations, while producer price deflation persisted.
In the Middle East, negotiations to secure a ceasefire in the Gaza war will resume in Doha, with the intelligence chiefs of Egypt, the United States, and Israel in attendance.
U.S. crude oil and gasoline inventories fell last week, according to market sources who cited American Petroleum Institute figures on Tuesday, indicating summer fuel demand is steady and driving the rebound after days of declines.
The API figures showed crude stocks were down by 1.923 million barrels in the week ended July 5, the sources said. Gasoline inventories fell by 2.954 million barrels. However, distillate supply rose 2.342 million barrels.
A U.S. Energy Information Administration (EIA) report on Tuesday also forecast global oil demand will outpace supply next year, reversing a prior call for a surplus.
Capping losses in oil prices, however, were comments from U.S. Federal Reserve Chair Jerome Powell that suggested the case for interest rate cuts is becoming stronger.
Lower interest rates should spur more economic growth, and therefore, oil consumption.
Following Powell's comments, investors continued to put a nearly 70% probability of a Fed rate cut in September.
"Powell's remarks to the Senate affirmed the improvement in data through the June quarter, while maintaining that more good data would boost confidence in the inflation outlook," ANZ analysts said in a note on Wednesday. - Reuters
