Oil prices fell by 0.2%, which was caused by the publication of data on US oil reserves and the further strengthening of the US currency. Investors also keep watch on diplomatic efforts in the Middle East.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.07% to 104.14 (the highest value since August 2).
The American Petroleum Institute (API) said that for the week ending October 18, crude oil inventories rose by 1.643 million barrels. Analysts had expected a build of 700,000 barrels. For the week prior, the API reported a 1.58-million-barrel draw in crude inventories. Gasoline inventories fell last week by 2.019 million barrels, while distillate inventories fell by 1.478 million barrels. Cushing inventories - the benchmark crude stored and traded at the key delivery point for U.S. futures contracts in Cushing, Oklahoma - fell by 216,000 barrels, compared to the 410,000-barrel build of the previous week.
Official data from the Energy Information Administration will be presented later today (at 14:30 GMT). Economists expect the data to indicate an increase in oil reserves by 0.7 million barrels.
Regarding the situation in the Middle East, the U.S. Secretary of State held "extended conversations" with the Israeli Prime Minister and senior Israeli leaders, urging them to get more humanitarian aid into Gaza. Meanwhile, Israel confirmed it had killed Hashem Safieddine, the heir apparent to late Hezbollah leader Hassan Nasrallah. Traders are also waiting to see how Israel retaliates against Iran for a missile strike earlier this month.
Overall, the oil market continues to reflect the geopolitical premium, and if tensions ease, investors' attention will switch back to weak fundamentals, and risks will be shifted downward.