Investing.com -- Oil prices settled higher Tuesday, as traders cheered expectations for a slowdown in U.S. production that helped support sentiment on crude following signs of fresh progress toward a new Israel-Hamas ceasefire that could help ease geopolitical tensions.
The West Texas Intermediate crude futures climbed 0.7% to $73.31 a barrel, and Brent oil futures expiring in April rose 0.8% to $78.69 a barrel,
U.S. production expected to slow in 2024; fresh U.S. crude supply data eyed
U.S. production has been recovering following a weather-related dip in January, but will likely slow from record levels in 2024, the Energy Information Agency said Tuesday as it cut its forecast for domestic oil output by 120,000 barrels per day to 170,000 bpd.
Higher production from non-OPEC countries including the U.S. has kept fears about oversupply alive at time when OPEC's measures to curb supplies have been underwhelming.
The forecast for slowing U.S. output comes ahead of the of crude inventory data from the American Petroleum Institute later Tuesday as well as a further report from EIA due Wednesday.
Analysts forecast crude inventories fell by 2.1M barrels in the week ended Feb. 2
Prolonged Gaza ceasefire possible, but more work to get truce deal over the line
U.S. Secretary of State Antony Blinken that an agreement to new ceasefile deal to halt the Israel-Hamas war is "possible" following a positive response from Palestinian militant group Hamas, though cautioned that there is "still a lot of work to do be done."
Blinken is set to discuss the Hamas response with Israeli officials when he travels to the country on Wednesday. The prospect of a ceasefire agreement could help ease geopolitical tensions in the oil-rich Middle East and cool fears about supply disruptions at time when a pledge from U.S. to proceed with further retaliatory strikes in the region has stoked concerns about a wider regional conflict.