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Oil trimmed gains on Wednesday as concerns over possible Middle East supply disruptions were offset by a jump in US inventories, indicating waning demand.
During mid-morning trading, West Texas Intermediate (CL=F) futures rose 0.1% to hover near $62.10 per barrel, erasing gains of more than 1.5%. Brent crude (BZ=F), the international benchmark, was also trading modestly higher, near $65.30.
Futures briefly turned negative after data from the Energy Information Administration showed US crude stockpiles rose for a fourth consecutive week. Inventories of refined products, especially gasoline, also increased.
Oil prices spiked overnight after CNN reported that new US intelligence suggests Israel is preparing a possible strike on Iranian nuclear facilities.
Iran is the third-largest producer of the Organization of Petroleum Exporting Countries (OPEC), with output of more than 3 million barrels per day.
The US had been negotiating a nuclear peace agreement with Tehran, with President Trump even hinting last week that a deal was close. However, the talks appear to have stalled over key sticking points—chiefly Iran’s insistence on enriching uranium.
"There is a lot of 'what if’s' that’s keeping crude prices in a nervous type of trade," wrote Dennis Kissler, senior vice president of trading at BOK Financial, in a note on Tuesday.
Several factors have kept a lid on oil prices in recent weeks, despite a rally from their April lows.
In early April, OPEC+ announced it would raise production starting in May. The oil cartel later agreed to further increase output in June.
Higher production than expected from OPEC producer Kazakhstan also indicates more supply in the market.
Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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