Oil prices fell on Wednesday as concerns over weak demand and rising supply outweighed the elevated risks of supply disruptions due to the Middle East conflict and Hurricane Milton in the U.S.
By 1103 GMT, Brent crude futures were down 0.47% at $76.82 per barrel, and U.S. West Texas Intermediate (WTI) futures dropped 0.58% to $73.14. Both benchmarks had gained over 1% earlier in the session, before reversing course.
The market’s volatility reflects a balance between geopolitical risks and bearish macroeconomic signals, particularly from China. China, the world’s largest crude importer, has disappointed investors by not announcing stronger fiscal stimulus measures to boost growth, dampening the outlook for fuel demand.
U.S. crude oil stocks also rose by nearly 11 million barrels last week, far more than analysts expected, contributing to the bearish sentiment. Meanwhile, the U.S. Energy Information Administration (EIA) revised its demand forecast 2025, citing weakening economic activity in China and North America.
Despite weak demand fundamentals, tensions in the Middle East remain a key risk. Markets are wary of a potential Israeli strike on Iranian oil infrastructure, which could drive oil prices higher. Additionally, investors are awaiting the outcome of talks between U.S. President Joe Biden and Israeli Prime Minister Benjamin Netanyahu amid escalating conflict in the region.
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