Oil prices fell 3.5% amid rising US inventories and prospects for a Gaza ceasefire

Oil prices fell to a 1.5-month low on Wednesday, pressured by a surprise increase in U.S. crude inventories to a 10-month high and rumors of a possible cease-fire between Israel and Hamas that would avoid disruptions to oil supplies in the Middle East.

Brent July futures on London's ICE Futures yesterday fell 3.5% to 83.5 (-4.2% for the week, -5.4% for the month), and June WTI futures for New York NYMEX - by 3.8% to $79/barrel (-4.8%, -6.7%).

We will remind that the reason for the speculative growth of quotations was the fear of the expansion of the conflict between Israel and Hamas to Lebanon, which could lead to a direct conflict with Iran and affect global oil supplies.

Negotiations on a cease-fire in Gaza have been going on for several weeks. Mediators from Qatar and Egypt are trying to get an end to the hostilities in the sector, the release of 133 hostages by Hamas (although at least 30 of them are believed to be dead) in exchange for Israel's withdrawal of its troops from Gaza.

U.S. crude oil inventories unexpectedly rose by 7.27 million barrels to a 10-month high, and EIA gasoline inventories rose by 344,000 barrels, while the market expected a decline of 2.5 million barrels and 1 million barrels, according to the EIA's weekly report. barrels respectively. Crude oil inventories in Cushing (the basis of WTI futures delivery) increased by 1.09 million barrels. Oil production in the US during April 20-26 remained at the level of the previous week at 13.1 million barrels/day, which is slightly inferior to the recently established record of 13.3 million barrels/day.

Oil quotes were also affected by negative economic news from the USA, where the ISM index in April fell by 1.1 to 49.2 (with expectations of 50), and construction spending in March decreased by 0.2% (with expectations of growth of 0 .3%).

Oil exports from the Russian Federation for April 15-21 decreased compared to the previous week by 500,000 barrels/day to 3.45 million barrels/day, as part of the processing facilities stopped after the Ukrainian UAV attacks. Prices for Urals oil in April were $72.95-73.4/barrel FOB, which corresponds to the March level.

A sharp drop in oil prices will affect stock market quotations of commodities used in biodiesel production. The day before, soybean oil prices in the US fell by 6% in two sessions, and today palm oil futures in Malaysia may collapse.