By Laila Kearney
Oil prices slipped on Wednesday as estimates showed swelling inventories and expectations that tensions in the Middle East were easing following a tour of the region by mediators.
Crude oil futures fell 9 cents to $77.11 a barrel, while U.S. West Texas Intermediate crude lost 10 cents at $73.07 per barrel.
U.S. crude oil stocks were seen rising last week by 347,000 barrels, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline and distillate stocks, however, fell by 1.043 million barrels and 2.247 million barrels respectively, according to the sources.
The United States is the world's biggest producer and consumer of oil, and growing inventories point to oversupply that could hinder prices.
Official U.S. government inventory estimates are set to be released on Wednesday at 10:30 a.m. local time.
Meanwhile, U.S. Secretary of State Antony Blinken wrapped up a trip to the Middle East intended to help broker a ceasefire agreement in Gaza.
Blinken and mediators from Egypt and Qatar have raised hopes for a U.S. "bridging proposal," which could shrink the gaps between the two sides in the 10-month-old war.
An escalation of a war in the region could curtail crude supplied by some of the world's large producers. Ongoing economic struggles in top crude importer China continued to haunt the market as well.
Analysis:
Oil prices have slipped due to rising inventories and easing tensions in the Middle East. This could lead to oversupply and hinder price growth. The recent trip by U.S. Secretary of State Antony Blinken to the region has raised hopes for a ceasefire agreement in Gaza, potentially impacting oil production in the area. Additionally, economic struggles in China are also affecting the market. Investors should keep an eye on inventory estimates and geopolitical developments to make informed decisions about their investments.