© Reuters. Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base/File Photo

By Robert Harvey

LONDON (Reuters) -Oil prices fell slightly on Wednesday, eating into the previous day’s gains as investors monitored developments in the Red Sea.

futures were down 53 cents, or 0.65%, at $80.54 a barrel by 1141 GMT. U.S. West Texas Intermediate crude lost 62 cents, or 0.82%, to $74.95.

Prices could be down on the day on Wednesday because of investor profit-taking after a strong rally on Tuesday, said UBS analyst Giovanni Staunovo.

Both benchmarks settled more than 2% higher in the previous session as fresh attacks on ships in the Red Sea prompted fears of shipping disruption, with further price support from hopes of U.S. interest rate cuts that could boost economic growth and fuel demand.

Despite the attacks by Yemen’s Iran-backed Houthi militia, large shipping companies such as Maersk and France’s CMA CGM were resuming passage through the Red Sea after the deployment of a multinational task force to the region.

The prospect of a prolonged Israeli military campaign in Gaza also remains a major driver of market sentiment.

Israeli forces pummelled central Gaza by land, sea and air on Wednesday after Israel’s Chief of Staff Herzi Halevi told reporters on Tuesday that the Gaza war would go on “for many months”.

Elsewhere, oil loadings at the Russian Black Sea port of Novorossiisk were suspended because of a storm on Wednesday, sources told Reuters.

But crude exports from the Caspian Pipeline Consortium (CPC) terminal near the port have already resumed, Kazakhstan’s energy ministry said.

stocks were expected to have fallen by 2.6 million barrels last week while distillate and gasoline inventories were likely expected to have risen, a preliminary Reuters poll showed on Tuesday.

Inventory reports from the American Petroleum Institute and the Energy Information Administration are expected on Wednesday and Thursday respectively, a day later than normal for both reports because of the Christmas holiday.