Oil prices traded under pressure this morning following reports of easing tensions in the Middle East and a build reported in the weekly US Oil stockpiles. Recent reports suggest that Israel and Hamas have reached a ceasefire agreement (phase 1 of the peace deal) after around two years of conflict, with Hamas agreeing to release all hostages while Israel will withdraw troops from the Gaza Strip, ING's commodity experts Ewa Manthey and Warren Patterson note.

US Crude Oil inventories increase for a second straight week

"Meanwhile, US inventory data from the Energy Information Administration (EIA) shows that crude Oil inventories increased for a second straight week by 3.7m barrels over the last week, as production increased and exports fell from the week before. This is also higher compared to the 2.8m barrels increase that the American Petroleum Institute (API) reported the previous day."

"Total Oil stocks stood at a little over 420m barrels, 4% below the five-year average. Meanwhile, crude stocks at Cushing fell by 763k barrels for a second consecutive week to 22.7m barrels over the reporting week, the lowest since late August. Crude imports rose by 570k b/d to 6.4m b/d, and exports declined by 161k b/d to 3.6m b/d."

"For refined products, gasoline stocks fell by 1.6m barrels, higher than the average market expectation of a draw of 1.46m barrels. Meanwhile, distillate stocks declined by 2m barrels, higher than the market's expected fall of 905k barrels. This was the largest weekly decline since late June. Furthermore, refinery utilisation rose by 1pp WoW to 92.4% over the reporting period."