NEW YORK -Oil prices rose nearly 1% on Wednesday, recovering from a sharp slide early this week, as data showed relatively strong U.S. demand, and as investors assessed the stability of a ceasefire between Iran and Israel.

Brent crude futures settled 54 cents higher, or 0.8%, at $67.68 a barrel, while U.S. West Texas Intermediate crude settled up 55 cents, or 0.85%, at $92, both paring some of the 13% losses made earlier in the week.

After U.S. President Donald Trump announced the ceasefire on Tuesday, Brent settled at its lowest since June 10 and WTI ended at its lowest since June 5 on the reduced Middle East supply risk. 

Oil prices had rallied after June 13, when Israel launched a surprise attack on key Iranian military and nuclear facilities. Prices hit five-month highs after the U.S. attacked Iran’s nuclear facilities over the weekend.

“While concerns regarding Middle Eastern supply have diminished for now, they have not entirely disappeared, and there remains a stronger demand for immediate supply,” said ING analysts in a client note.

Prices found support from Wednesday’s government data that showed U.S. crude, gasoline and distillate inventories fell last week. 

Crude inventories dropped by 5.8 million barrels, data showed, compared with analysts’ expectations in a Reuters poll for a 797,000-barrel draw.

Gasoline stocks unexpectedly fell by 2.1 million barrels, compared with forecasts for a 381,000-barrel build as gasoline supplied, a proxy for demand, rose to its highest since December 2021.

“We are looking at big draws across the board,” said Phil Flynn, senior analyst with the Price Futures Group. “This type of report can refocus on U.S. supply and demand, and less on geopolitics.”

A slew of U.S. macroeconomic data released overnight, including data on consumer confidence, showed possibly weaker-than-expected economic growth in the world’s largest oil consumer, bolstering expectations of a Federal Reserve rate cut this year.

Oil prices will likely consolidate at around $65-70 per barrel levels as traders look to more U.S. macroeconomic data this week and the Fed rate decision, said independent market analyst Tina Teng.

The market is betting that the Fed could cut U.S. interest rates as soon as September, which would typically spur economic growth and demand for oil.

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