Oil prices remained largely stable on Wednesday, as worries about potential conflict spreading in the Middle East and endangering production in one of the world's key crude-producing regions subsided somewhat. Brent crude futures decreased by 10 cents, or 0.1 percent, to $80.59 a barrel as of 1057 GMT. US West Texas Intermediate crude futures fell by 19 cents, or 0.2 percent, to $78.16 per barrel.
After reaching a seven-month low of $76.30 at the start of last week, Brent saw a more than 3 percent increase on Monday, culminating in a five-day streak of gains and closing at $82.30 a barrel. "The recent surge in crude prices paused yesterday with a decline in prices as concerns about a retaliatory attack on Israel by Iran diminished, reducing the risk premium," noted Ashley Kelty, an analyst at Panmure Liberum.
"The scale of Iran's retaliation, along with Israel's reaction, will likely influence whether the current conflict in the Middle East escalates into a broader regional conflict," commented Vivek Dhar, an analyst at Commonwealth Bank of Australia. Additionally, the International Energy Agency reduced its 2025 forecast for oil demand growth on Tuesday, attributing it to the effects of a weakened Chinese economy on consumption, following a similar adjustment by OPEC for 2024.
Earlier trading saw support for prices due to signs of stronger US demand. "The American Petroleum Institute reported a substantial drawdown in US crude inventories of 5.2 million barrels, significantly exceeding the anticipated decline of 2 million. This data indicates that oil demand remains robust," explained Danish Lim, investment analyst at Phillip Nova. Official US government data from the Energy Information Administration is expected later on Wednesday.
