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A general view of the newly-commissioned Dangote petroleum refinery in Ibeju-Lekki, Lagos, Nigeria. Picture: TEMILADE ADELAJA/REUTERS
A general view of the newly-commissioned Dangote petroleum refinery in Ibeju-Lekki, Lagos, Nigeria. Picture: TEMILADE ADELAJA/REUTERS

Singapore — Oil prices dipped on Wednesday after inflation in top crude importer China came in weaker than expected, while traders weighed the rising possibility of a ceasefire deal in Gaza as negotiations are set to resume later in the day.

Brent futures were down 27c, or 0.3%, at $84.39 a barrel by 5.15am GMT, after falling 1.3% in the previous session.

US West Texas Intermediate (WTI) crude was down 20c, or 0.25%, to $81.21 a barrel, after falling 1.1% in the previous session.

Both the contracts lost about 3% in the previous three sessions on signs that the Texas energy industry came off relatively unscathed from Hurricane Beryl after it lashed the region on Monday.

Oil and gas companies restarted some operations on Tuesday. Some ports reopened and most producers and facilities were ramping up output, though some facilities sustained damage and power had not been fully restored yet.

“Expectations for easing tensions in the Middle East and Chinese weaker-than-expected CPI [consumer price index] data for June pressed on oil prices today,” said independent market analyst Tina Teng.

Consumer prices in the world’s second-largest economy grew for a fifth month in June, but missed expectations, while producer price deflation persisted.

In the Middle East, negotiations to secure a ceasefire in the Gaza war will resume in Doha, with the intelligence chiefs of Egypt, the US, and Israel in attendance.

US crude oil and petrol inventories fell last week, according to market sources who cited American Petroleum Institute figures on Tuesday, indicating summer fuel demand is steady and driving the rebound after days of declines.

The API figures showed crude stocks were down by 1.923-million barrels in the week ended July 5, the sources said. Petrol inventories fell by 2.954-million barrels. However, distillate supply rose 2.342-million barrels.

A US Energy Information Administration (EIA) report on Tuesday also forecast global oil demand will outpace supply in 2025, reversing a prior call for a surplus.

Capping losses in oil prices, however, were comments from US Federal Reserve chair Jerome Powell that suggested the case for interest rate cuts is becoming stronger.

Lower interest rates should spur more economic growth, and therefore, oil consumption.

After Powell’s comments, investors continued to put a nearly 70% probability of a Fed rate cut in September.

“Powell’s remarks to the Senate affirmed the improvement in data through the June quarter, while maintaining that more good data would boost confidence in the inflation outlook,” ANZ analysts said in a note on Wednesday.

Reuters

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