Oil prices fall due to rising US crude inventories and easing tensions in the Middle East

By Laila Kearney

(Reuters) – Oil prices fell on Wednesday on estimates pointing to rising U.S. crude inventories and expectations that tensions in the Middle East will ease following a mediator tour of the region.

Brent crude futures fell 9 cents to $77.11 a barrel by 00:01 GMT. U.S. West Texas Intermediate crude lost 10 cents to $73.07 a barrel.

US crude oil inventories rose by 347,000 barrels last week, market sources reported on Tuesday, citing figures from the American Petroleum Institute. However, gasoline and distillate inventories fell by 1.043 million barrels and 2.247 million barrels, respectively, according to the sources.

The United States is the world's largest producer and consumer of oil, and growing inventories indicate an oversupply that could depress prices.

The U.S. government's official inventory estimates are expected to be released at 10:30 a.m. local time on Wednesday.

Meanwhile, US Secretary of State Antony Blinken concluded a trip to the Middle East to broker a ceasefire agreement in the Gaza Strip.

Blinken and mediators from Egypt and Qatar have raised hopes of a US “bridge proposal” that could narrow the gap between the two sides of the 10-month-long war.

An escalation of the war in the region could lead to a shortage of crude oil supplies from some of the world's largest producers.

The ongoing economic problems of China, the largest crude oil importer, also continued to weigh on the market.

(Reporting by Laila Kearney in New York)