Oil prices flat amid signs of US inventory build; Gaza ceasefire in focus

Investing.com-- Oil prices moved little in Asian trade on Wednesday, seeing little relief from recent losses as industry data signaled an unexpected build in U.S. inventories, while progress towards an Israel-Hamas ceasefire remained in focus.

Crude prices were nursing steep losses in recent sessions on persistent concerns over slowing demand in top importer China, while the prospect of easing tensions in the Middle East also saw traders attach a smaller risk premium to oil.

Brent oil futures expiring in October steadied at $77.21 a barrel, while West Texas Intermediate crude futures were flat at $76.61 a barrel by 20:48 ET (00:48 GMT). 

Caution before an address by Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium later this week also kept oil markets on edge. 

US inventories see small build- API 

Data from the American Petroleum Institute showed that U.S. inventories grew nearly 0.4 million barrels in the week to August 16, against expectations for a draw of 2.8 mb.

The API data usually heralds a similar reading from official inventory data, which is due later on Wednesday, and spurred some concerns that U.S. demand was cooling as the travel-heavy summer season came to a close. 

Data from the Energy Information Administration showed U.S. inventories grew for the first time in nine weeks earlier in August, with smaller draws in gasoline and distillate inventories furthering the notion that demand was cooling. 

U.S. oil production recently hit record highs, furthering concerns of oversupplied oil markets. 

Israel agrees to “bridging” ceasefire, Hamas reluctant 

Media reports earlier this week showed Israel had agreed to a preliminary ceasefire deal brought on by the U.S., although the details of the agreement were still to be negotiated.

But reports showed Hamas was critical of the new deal, and that it reflected an American bias towards Israel. Hamas also issued a statement criticizing U.S. President Joe Biden. 

Hamas’ comments came as Israel continued its offensive against Gaza, which further complicated the prospect of a ceasefire. 

The Israel-Hamas war has been a key point of contention for oil markets, amid persistent concerns that a spillover in the conflict could disrupt oil supplies in the Middle East.

U.S. Secretary of State Antony Blinken was seen shuttling between Egypt, Qatar and Israel earlier this week to broker a ceasefire. But no deal appeared to be reached so far.