Oil edges down as investors await US midterm election results

BEIJING: Oil prices slipped in early trade on Wednesday as investors awaited the results of the US midterm elections and their potential impact on peace talks in the Middle East, even as industry data showed US crude inventories unexpectedly fell last week.

Brent crude futures fell 26 cents, or 0.25 per cent, to US$103.34 a barrel by 1.57am GMT. US West Texas Intermediate (WTI) crude futures declined 53 cents, or 0.55 per cent, to US$95.56.

In the previous session, Brent fell more than one per cent to its lowest level in nearly four weeks as traders weighed talks to end the wars in Ukraine and Iran.

Vote counting was underway in the US midterm elections, which will determine whether President Donald Trump's Republican Party retains control of Congress for the remainder of his second term.

Markets remained alert to any progress in talks to end the US-Israeli war with Iran, as Qatar stepped up mediation efforts to avert an escalation in attacks after the US midterm elections.

A senior Iranian official told Reuters on Tuesday that Iran and the United States remained far from reaching a deal to end their war.

The United States carried out "defensive" strikes on Iran's Qeshm island targeting surface-to-air missiles used against US assets, a US official said on Tuesday. Another official said the strikes appeared limited and did not signal a return to major combat operations.

US President Donald Trump told the Financial Times on Tuesday that the United States had no immediate plans to strike Iran.

"We seem to be getting everything we want," Trump said in a six-minute telephone interview.

Meanwhile, crude inventories fell by 5.27 million barrels in the week ended Oct 30, market sources said on Wednesday, citing data from the American Petroleum Institute (API).

Eight analysts polled by Reuters had expected crude inventories to rise by an average of about 880,000 barrels.

Gasoline inventories rose by 1.43 million barrels, while distillate inventories fell by 1.19 million barrels from a week earlier, the sources said.

"Diesel inventories remain tight, while gasoline stocks rose more than expected. The data are broadly supportive of oil prices," Haitong Futures said in a note on Wednesday.

Official data from the US Energy Information Administration is due at 10.30am EST (3.30pm GMT) on Wednesday.