Oil prices were steady on Wednesday after data on US crude inventories showed a stronger-than-expected rise and the US sharply cut its output forecast, allaying fears of a potential oversupply.
Brent crude oil futures were down by 0.02 USD, or 0.03%, at 78.57 USD per barrel, while the US West Texas Intermediate (WTI) was up by 0.01 USD, or 0.01%, at 73.32 USD per barrel.
Data from the American Petroleum Institute (API) showed that US crude inventories rose by 670,000 barrels in the week to February 2, well below analysts polled by Reuters for a 1.9 million barrel increase.
The US government’s weekly data on oil inventories will be released later on Wednesday.
For 2024, the US Energy Information Administration (EIA) cut its forecast for oil production growth by 120,000 barrels per day to 170,000 barrels per day, significantly lower than last year’s output increase of 1.02 million barrels per day.
The administration also forecast that US production would not exceed the December 2023 record of more than 13.3 million barrels per day before February 2025.
The forecast supports the view that the oil market will remain balanced in 2024, analysts at Haitong Futures said, adding that they expect oil prices to move in a range of $10 below or above their current levels.
Meanwhile, ambassadors from the US, Qatar and Egypt are trying to bridge differences between Israel and Hamas through diplomacy as part of a plan to end the war in Gaza after the Palestinian group responded to an offer to end fighting and release hostages.
Traders continue to closely monitor the situation in the Middle East, particularly attacks on ships by the Iran-backed Houthis along key Red Sea routes that have disrupted traffic through the Suez Canal, the fastest sea route between Asia and Europe and the one through which passes almost 12% of the world’s oil trade.
On Tuesday, the Houthis said they fired missiles and damaged two ships in the Red Sea.
Bolstering oil supply, an Exxon Mobil-led consortium that controls all of Guyana’s oil production is producing about 645,000 barrels per day in the South American country, up from about 400,000 barrels per day at the end of 2023.
