Oil changed a little on Wednesday after a sharp decline in the previous session, which snapped a three-day winning streak amid ongoing concerns about potential supply losses from the Middle East and North Africa and global fuel demand concerns.
Brent crude futures rose 8 cents to $79.63 a barrel by 0653 GMT. WTI crude futures were up 7 cents at $75.60.
Prices fell more than 2% on Tuesday, snapping a three-day winning streak of more than 7% as concerns about lower refinery margins weighed on fuel demand expectations amid data showing global consumption growth was weaker than forecast.
While a decline in U.S. oil and fuel inventories last week supported prices, geopolitical risks continued to weigh on the market. The potential loss of Libyan oil production and the widening of the Israel-Gaza conflict to include Iranian-backed militants from Lebanon’s Hezbollah remain the biggest risks to oil markets.
Several oil fields in Libya have halted production as closures spread amid a dispute between rival government factions over control of the central bank and oil revenue. The dispute puts production of about 1.2 million barrels a day at risk.
There has been no immediate confirmation of any closures from the Tripoli-based government or the National Oil Corporation (NOC), which oversees oil resources.
But engineers at the Amal and Nafoora oil fields in the southeast told Reuters that production had been halted, while engineers at Abu Attifel, also in the east, said production was decreasing.
In the Middle East, fighting between Israel and Hamas militants in the Gaza Strip continued, displacing Palestinians, and there were few signs of tangible progress in ceasefire talks in Cairo. Over the weekend, Israel and Hezbollah attacked each other across the Lebanese border with rockets and missiles.
The fighting between Israel and Hezbollah threatens to derail ceasefire talks. While both sides say they have concluded military operations for now, the market is still worried about an outbreak.
Citing figures from the American Petroleum Institute (API) on Tuesday, U.S. crude oil inventories fell by 3.407 million barrels in the week ending Aug. 23, market sources said. Gasoline inventories fell by 1.863 million barrels and distillates by 1.405 million barrels.
Weekly U.S. oil storage data from the U.S. Energy Information Administration (EIA) is expected later on Wednesday.
