Oil prices dip as US crude stocks rise

HOUSTON:

Oil prices edged lower on Wednesday after US crude inventories rose unexpectedly and as worries that a wider Middle East conflict could threaten production in one of the world's major regions for crude production eased slightly.

Brent crude futures slipped 41 cents, or 0.5%, to $80.28 a barrel by 1436 GMT. US West Texas Intermediate crude futures fell 55 cents, or 0.7%, to $77.77 per barrel.

US crude inventories rose by 1.4 million barrels, compared with estimates for a 2.2 million barrel drop, data from the US Energy Information Administration showed. Gasoline and distillate inventories fell more than expected. American Petroleum Institute figures on Tuesday had pointed to a 5.21 million barrel drop last week.

Brent had risen more than 3% on Monday to cap a five-day run of gains, closing at $82.30 a barrel, after hitting a seven-month low of $76.30 at the beginning of last week.

Iran had vowed a severe response to the killing of the leader of Hamas late last month. Three senior Iranian officials have said that only a ceasefire deal in Gaza would hold Iran back from direct retaliation against Israel for the assassination.

Israel has neither confirmed nor denied its involvement. To counter Iran, the United States Navy has deployed warships and a submarine to the Middle East.

"Tighter supplies are well priced in," said Dennis Kissler, senior vice president of trading at BOK Financial. Also hindering oil price gains, the International Energy Agency (IEA) trimmed on Tuesday its 2025 estimate for oil demand growth, citing the impact of a weakened Chinese economy on consumption. That came after OPEC cut expected demand for 2024 for similar reasons.

A recent string of dismal indicators have dulled expectations for China's economic performance in July.