Oil Prices Rise on Gaza Ceasefire Setback, but Jump in US Crude Stocks Weighs
Oil prices settled higher due to fading hopes of a Gaza ceasefire agreement, which cooled concerns about potential supply disruptions in the Middle East. However, gains were stifled by a larger than expected build in U.S. crude inventories.
At 14:30 ET, futures settled up 0.8% to $73.86 per barrel.
Gaza Ceasefire Dashed After Netanyahu Rejects Hamas Ceasefire Deal
Israel’s Prime Minister Benjamin Netanyahu rejected a ceasefire deal proposed by Hamas, dashing hopes of a ceasefire that could potentially disrupt crude supplies in the oil-rich Middle East region.
Netanyahu said the demands proposed by Hamas were “delusional,” and criticized their lack of commitment to negotiate.
The remarks come a day after U.S. Secretary of State Antony Blinken said that an agreement was still possible.
US Inventories Jump Much More Than Expected
U.S. inventories jumped by roughly 5.5M barrels in the week ended Feb. 2, well above expectations of about only 1.7M barrels.
Gasoline inventories, one of the products that crude is refined into, increased by roughly 3.2M barrels against expectations for a build of 140,000 barrels, while distillate stockpiles rose by 3.2M barrels, compared to expectations for a drop of 1M barrels.
The mixed petroleum report comes as U.S. oil output growth is forecast to slow, the EIA said Tuesday, after cutting its forecast for 2024 domestic production to 120,000 barrels per day to 170,000 bpd.
