(Investing) – Oil prices steadied Wednesday as renewed military action between Israel and Hamas threatened to upset a recent ceasefire, although caution before the conclusion of a Federal Reserve meeting kept traders to the sidelines.
At 08:40 ET (12:40 GMT), for December rose 0.1% to $63.86 a barrel, and traded largely unchanged at $60.15 a barrel.
Oil prices stemmed two straight days of losses, as markets looked to potential supply disruptions from renewed hostilities in the Gaza strip.
Gaza ceasefire tested after Israel-Hamas strikes
Israel on Tuesday launched attacks in Gaza after accusing Palestinian group Hamas of violating a U.S.-brokered ceasefire in the region.
Tuesday’s attacks were the second instance of military action in Gaza after Israel and Hamas agreed to the first steps of a U.S.-brokered peace deal signed earlier in October.
Resurgent military action between Israel and Hamas threatens to upset the ceasefire – a notion that spurred renewed concerns over potential oil supply disruptions in the Middle East.
But U.S. officials said that the ceasefire still appeared to be holding, cutting earlier gains as traders priced out some risk premium from crude.
U.S. crude inventories fall – API
Crude prices had received a boost late Tuesday by data showing a fall in U.S. crude and fuel inventories last week.
Crude stocks fell by 4.02 million barrels for the week ended October 24, according to data from the American Petroleum Institute.
Gasoline inventories dropped by 6.35 million barrels, while distillate inventories fell by 4.36 million barrels from a week earlier.
Fed decision looms large
Still, any gains in oil prices largely stalled ahead of the latest rate decision by the Federal Reserve.
The central bank is widely expected to later on Wednesday, especially after data last week showed further cooling in U.S. inflation.
But focus will be squarely on Fed Chair Jerome Powell’s comments on the economy and future monetary policy, especially with markets split over how much further the Fed will cut rates.
Ambar Warrick contributed to this article
