Investing.com– Oil prices edged lower Wednesday amid uncertainty over global production as a potential Middle East ceasefire hangs in the balance.

At  08:40 ET (12:40 GMT), fell 0.5% to $82.91 a barrel, while dropped 0.6% to $78.04 a barrel. 

Israel-Hamas ceasefire deal remains elusive 

Palestinian militant group Hamas on Monday agreed to a Gaza ceasefire proposal from mediators, but Israel said the terms did not meet its demands and undertook strikes on the city of Rafah, in southern Gaza. 

While Israel was still seen preparing for ceasefire negotiations later, the recent escalation in military action showed little actual progress towards a deal.

A lack of settlement between the parties in the now seven-month long conflict has supported oil prices, as investors worry regional escalation of the war will disrupt Middle Eastern crude supplies.

That said, little actual disruption has been seen to date, and the benchmarks posted the steepest weekly losses in three months last week as investors worried about the prospect of higher-for-longer interest rates curbing growth in the U.S., the top global oil consumer.

Russia to agree to lift production? 

The market has edged lower Tuesday after news reports said Russian Deputy Prime Minister Alexander Novak indicated OPEC+ could move to raise crude production.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are making voluntary output cuts totalling about 2.2 million barrels per day for the first half of 2024, on top of earlier reductions announced in various steps since late 2022, bringing the total pledged cuts to just under 6 million barrels per day.

Bloomberg reported Monday that Russia’s oil and gas revenues doubled in April despite sanctions, creating room for Moscow to agree raise output, even is prices suffer as a consequence.

OPEC+ is scheduled to meet on June 1 in Vienna to decide its next output policy steps.

US inventories data due

As well as Middle East tensions, the latest U.S. inventory reports will also be in focus Tuesday.

The releases its weekly forecasts of U.S. crude oil and product stockpiles later in the session, and these are expected to have fallen.

stockpiles sprung a surprise increase the previous week, the API reported last week, with inventories rising by about 4.9 million barrels for the week ended April 26.

The Energy Information Administration will also publish its latest later in the session, which will include the EIA’s latest views on the global oil market, and its latest forecast for U.S. oil and gas production for the remainder of this year and 2025. 

(Ambar Warrick contributed to this article.)