Brent crude futures rose 16 cents, or 0.2%, to $78.75 a
barrel as of 0417 GMT, while U.S. West Texas Intermediate crude climbed 20
cents, or 0.3%, to $73.51.
American Petroleum Institute figures showed U.S. crude
stocks rose 670,000 barrels in the week to Feb. 2, well below forecasts for a
1.9 million barrel build from analysts polled by Reuters.
U.S. government weekly data on oil inventories will be
released later on Wednesday.
For 2024, the U.S. Energy Information Administration (EIA)
on Tuesday cut its outlook for domestic oil output growth by 120,000 barrels
per day (bpd) to 170,000 bpd, sharply lower than last year's output increase of
1.02 million bpd.
EIA also forecast U.S. production would not exceed the
December 2023 record of more than 13.3 million barrels per day (bpd) until
February 2025.
The outlook strengthened the case that the oil market will
be balanced in 2024, analysts at Haitong Futures said in a note, adding that
they expect oil prices to remain in a $10 range around current levels.
Meanwhile, U.S., Qatari and Egyptian mediators prepared a
diplomatic push to bridge differences between Israel and Hamas on a ceasefire
plan for Gaza after the Palestinian group responded to a proposal for an
extended pause in fighting and hostage releases.
Traders have been closely following the situation in the
Middle East, especially attacks on shipping by Iranian-backed Houthi rebels in
the crucial Red Sea that has disrupted traffic through the Suez Canal, the
fastest sea route between Asia and Europe and one that sees nearly 12% of the
global oil trade.
Houthis said on Tuesday they had fired missiles at two
vessels in the Red Sea, causing damage to the ships.
"Given the heightened geopolitical risk, the rangebound
trading and lack of a risk premium may surprise some," ING analysts Warren
Patterson and Ewa Manthey said in a note.
"It's important to remember that while we are seeing
disruptions to trade flows as a result of Red Sea developments, oil production
remains unchanged as a result."
Bolstering oil supply, a consortium led by Exxon Mobil, opens new tab that controls all oil production in Guyana is pumping about 645,000 bpd in the South American country, up from about 400,000 bpd in late 2023. Reuters