HG MARKETS:

Oil prices remained stable on Wednesday near one-month lows, following declines in the previous two sessions, as markets assessed the potential impact of a ceasefire between Israel and Hezbollah, rising OPEC+ crude production, and fluctuating U.S. fuel inventories. Brent crude futures rose by 38 cents, or 0.5%, to $71.50 per barrel, while U.S. West Texas Intermediate (WTI) futures increased 35 cents, or 0.5%, to $67.56 per barrel.

The recent price drop was driven by reports that Israeli Prime Minister Benjamin Netanyahu is scheduled to meet with key ministers, military officials, and intelligence leaders to explore diplomatic solutions to the conflict in Lebanon. The push for a ceasefire in Lebanon coincides with similar efforts in Gaza and comes just days ahead of the U.S. presidential election, raising the possibility of de-escalation in the region.

Meanwhile, traders are also monitoring the upcoming production increases from OPEC+, the group comprising the Organization of the Petroleum Exporting Countries and its allies, including Russia. OPEC+ is set to raise output by 180,000 barrels per day (bpd) in December, even as the market shows signs of softness. The group had previously implemented production cuts totaling 5.86 million bpd, approximately 5.7% of global demand.

In the U.S., crude inventories fell by 573,000 barrels for the week ending October 25, according to sources. This was in contrast to market expectations had projected an increase of 2.2 million barrels. Official inventory data from the U.S. government is expected later on Wednesday, which could provide further clarity on domestic supply trends.

Beyond geopolitical developments and supply adjustments, concerns over demand from China remain in focus. Investors are awaiting potential economic stimulus measures from Beijing, with reports suggesting that the Chinese government may approve over 10 trillion yuan ($1.4 trillion) in additional debt issuance in the coming years to bolster the country’s fragile economy.

As markets navigate these complexities, the results of the U.S. presidential election, the status of OPEC+ production increases, and shifts in Chinese policy will remain critical factors shaping oil price movements in the near term.