By Adedapo Adesanya
Oil prices fell on Wednesday after data from the United States showed rising crude inventories as risks heightened due to possible Iranian supply disruptions caused by the Middle East conflict and Hurricane Milton.
Brent crude futures settled at $76.58 a barrel after falling by 60 cents or 0.8 per cent and the US West Texas Intermediate (WTI) futures lost 33 cents or 0.5 per cent to trade at $73.24 a barrel.
The US Energy Information Administration (EIA) reported an inventory increase of 5.8 million barrels for the week to October 4 versus the build of 3.9 million barrels for the previous week.
It also follows an estimated inventory increase of a sizable 10.9 million barrels, as reported by the American Petroleum Institute (API) on Tuesday.
Earlier in the week, the EIA cut oil demand expectations and now expects global demand to add some 1.2 million barrels per day next year, which is down by 300,000 barrels per day from earlier EIA forecasts.
The market is also waiting for the impact of a second major storm called Hurricane Milton, which has already driven up demand for petrol in the state of Florida, a development that has helped support crude prices.
Dozens of energy companies shut down their pipelines and fuel-delivery terminals in Tampa, Florida.
On the geopolitical front, the market continues to await a potential Israeli attack on Iranian oil infrastructure, even after oil prices tumbled by more than 4 per cent on Tuesday on a possible Hezbollah-Israel ceasefire deal being reached.
On Wednesday, US President Joe Biden spoke with Israeli Prime Minister Benjamin Netanyahu about Israel’s plans concerning oil producer Iran in a call.
Details of the discussion remain out of reach for the media.
Market analysts note that alternating ceasefire talks and further escalation in attack reports are distracting investors, who are waiting for the reality to play out.
Meanwhile, China, the world’s largest oil importer, expressed confidence in achieving its full-year growth target.
However, the government did not introduce stronger fiscal steps and disappointed investors who had banked on more support for the economy.
Investors have worried about slow growth dampening fuel demand in the world’s largest crude importer.