Oil prices crept higher on Wednesday, though Brent still languished near seven-month lows, pressured by concerns over weak demand and fears of recession in the United States.
The threat of conflict escalating in the Middle East and endangering oil production has supported prices since Tuesday.
Brent crude futures were up 45 cents, or 0.6%, to $76.93 a barrel at 0823 GMT. U.S. West Texas Intermediate crude was up 47 cents, also 0.6%, to $73.67.
On Monday, Brent futures slumped to their lowest since early January and WTI futures touched their lowest since February, as a global stock market rout deepened on concerns of a potential recession in the U.S. after weak jobs data.
“Whether the reversal in risk asset prices will prove to be a mere bottom-picking before the sell-off continues or investors have taken the time to thoroughly assess the medium-term implications of the US job data is open for debate,” said Tamas Varga of oil broker PVM. Supporting the bearish demand view, Chinese trade data showed that July daily crude oil imports fell to the lowest level since September 2022. Prices slipped earlier in the trading session, following U.S. data showing an unexpected build in crude oil and gasoline inventories. U.S. crude oil, gasoline and distillate inventories rose last week, according to market sources citing American Petroleum Institute figures on Tuesday.
The U.S. Energy Information Administration is due to release weekly inventory data at 10:30 a.m. (1430 GMT) on Wednesday.
But both oil benchmarks broke a three-session declining streak on Tuesday, as tensions in the Middle East stoked supply concerns.
The Middle East is bracing for a possible new wave of attacks by Iran and its allies following last week’s killing of senior members of militant groups Hamas and Hezbollah, with concern that the conflict in Gaza is turning into a wider Middle East war.
U.S. officials have been in constant contact with allies and partners in the region and there is a “clear consensus” that no one should escalate the situation, Secretary of State Antony Blinken said on Tuesday.
“Any escalation of the conflict in the Middle East could see a greater risk of disruptions to supplies from the region,” ANZ analyst Daniel Hynes said. (Reporting by Paul Carsten in London, Nicole Jao in New York and Colleen Howe in Beijing; Editing by Kim Coghill and Mark Potter)