Oil markets showed only modest movement at the opening on Wednesday following a turbulent trading day on Tuesday. U.S. West Texas Intermediate (WTI) futures were up 15 cents, or 0.15 percent, reaching $102.42 per barrel as of 2251 GMT.
Traders had reacted to a mixed set of developments. A fragile ceasefire in the Middle East held, even as reports indicated there had been exchanges of fire. The market reaction on Tuesday saw WTI close down 3.9 percent, while Brent dropped 4 percent to finish at $109.87.
In parallel with geopolitical developments, inventory data released via market sources and attributed to the American Petroleum Institute showed continued tightening in U.S. petroleum stocks. According to those figures, U.S. crude oil inventories declined for a third consecutive week. The sources, who spoke on condition of anonymity, reported a crude stock draw of 8.1 million barrels in the week ended May 1.
Refining-related stock changes accompanied the crude draw. Gasoline inventories were reported down by 6.1 million barrels for the same week, while distillate stocks declined by 4.6 million barrels compared with the prior week, according to the market-sourced API estimates.
The combination of the ceasefire holding, albeit tenuously given reported exchanges of fire, and successive weekly inventory draws contributed to a market that opened with little net change after the prior session's volatility. Prices had moved noticeably lower on Tuesday despite the ceasefire announcement.
Market participants cited in the inventory report were not named. The data cited were provided by the American Petroleum Institute and relayed by market sources.
Context and market flow
On Tuesday, oil prices experienced a sharp session followed by a modest rebound into Wednesday's open. WTI's small uptick to $102.42 per barrel came after a 3.9 percent fall at Tuesday's close, while Brent concluded Tuesday trading at $109.87 following a 4 percent decline.
Inventory figures from the American Petroleum Institute showed a third straight weekly decline in U.S. crude stocks, with gasoline and distillates also drawing down. The figures reported were: crude down 8.1 million barrels, gasoline down 6.1 million barrels, and distillates down 4.6 million barrels for the week ended May 1.
These developments left markets in a cautiously balanced state as traders weighed inventory draws against the fragile ceasefire situation in the Middle East.