LONDON — The price of oil staged a modest recovery Wednesday, a day after hitting a four-week low, but traders say bigger gains would likely be short-lived.
Benchmark oil for August delivery was up 17 cents to $103.27 per barrel in midday trading in Europe in electronic trading on the New York Mercantile Exchange. The contract fell $1.47 Tuesday to finish at $103.08 per barrel, the lowest closing price since July 3.
Traders are waiting to see if the Energy Department will report another draw in oil supplies after a surprisingly large drop of 30 million barrels over the past month. However, oil supplies remain high compared with the five-year average, and that will constrain the price of crude.
"Energy prices have been supported in recent weeks by renewed optimism about global demand and a revival of concerns about the geopolitical situation in the Middle East. However, we do not expect this to last," Jessica Hinds of Capital Economics said in a commentary.
"On the demand side, although US crude stocks have fallen by more than expected recently, we would be wary of placing too much weight on this development," Hinds said.
Later Wednesday, the Federal Reserve will give an updated assessment of the U.S. economy when it wraps up a two-day meeting in Washington. The government will also release the first reading of second-quarter gross domestic product growth. Analysts expect the economy to have expanded more slowly last quarter compared with the 1.8 percent growth reported for the first three months of the year.
On Friday the release of employment data for July will be examined for hints about future energy demand in the world's No. 1 economy.
Brent crude, which is traded in London, fell 69 cents to $106.22.
In other energy futures trading on Nymex:
— Wholesale gasoline fell 3 cents to $2.94 a gallon.
— Heating oil was broadly unchanged at $3.01 a gallon.
— Natural gas rose 1 cent to $3.44 per 1,000 cubic feet.