Adedapo Adesanya
By Adedapo Adesanya
The two major crude oil grades recorded some gains following talk of a possible lengthy ceasefire in the Gaza War, with Brent rising by 0.77 per cent or 60 cents to $78.59 a barrel, and the US West Texas Intermediate (WTI) appreciating by 0.73 per cent or 53 cents to $73.51 a barrel.
The US Secretary of State, Mr Antony Blinken, on a Middle East trip to seek an end to the Gaza War, said a Hamas reply to a proposal for a ceasefire was being reviewed on Tuesday.
The proposed deal, drawn up more than a week ago by the US and Israel at a meeting with Egypt and Qatar, would secure the release of remaining hostages held by militants in Gaza in return for a long pause to fighting.
Hamas said it responded “in a positive spirit, ensuring a comprehensive and complete ceasefire, ending the aggression against our people, ensuring relief, shelter, and reconstruction, lifting the siege on the Gaza Strip, and achieving a prisoner swap.”
At the same time, the US continued its campaign against Iran-backed Houthis in Yemen, whose attacks on shipping vessels have disrupted global oil trading routes.
According to analysts, the US strikes do not point to an easing of tensions.
In its Short-Term Energy Outlook, the US Energy Department said US output would grow by 170,000 barrels per day this year, down from the previous forecasted rise of 290,000 barrels per day.
Crude oil inventories in the US rose by 674,000 barrels for the week ending February 2, according to the American Petroleum Institute (API), after analysts predicted a build of 2.133 million barrels. The API reported a 2.5-million-barrel dip in crude inventories in the week prior.
This is as refiners in the US are performing overhauls on plants across the country and an outage last week at the British Petroleum refinery in Whiting, Indiana, will limit production.
Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
Some other analysts also said it would be difficult for oil to return to previous highs, given the run of strong economic indicators from the US was likely to lose steam.
