The oil market was up by about 2 per cent on Wednesday after a drop in US crude inventories as investors awaited the next steps in talks to end the Ukraine war, with sanctions on Russian crude remaining in place for now.
At midweek, Brent crude futures grew by $1.05 or 1.6 per cent to settle at $66.84 a barrel, and the US West Texas Intermediate (WTI) crude futures rose by 86 cents or 1.4 per cent to trade at $63.21 per barrel.
Crude oil inventories in the United States decreased by 6 million barrels during the week ending August 15, after growing by 3 million barrels in the week prior, according to new data from the US Energy Information Administration (EIA) released on Wednesday. The build brings commercial stockpiles to 420.7 million barrels, which is 6 per cent below the five-year average for this time of year.
The EIA’s data release followed figures from the American Petroleum Institute (API) a day earlier, which suggested that crude oil inventories contracted by 2.4 million barrels.
Previously, prices had fallen more than 1 per cent on optimism that an agreement to end the Russia-Ukraine war seemed closer.
Market analysts noted that the Ukraine and Russian negotiations have gone back and forth from bearish to bullish as far as the impact on future oil balances is concerned.
Russia launched 270 drones and 10 missiles against Ukraine on August 19, in a kinetic response to Ukrainian President Volodymyr Zelenskyy’s White House talks with US President Donald Trump and key European allies.
US President Donald Trump conceded that Russian President Vladimir Putin might not want to make a deal.
Russia was the second-biggest producer of crude in 2024 behind the US, so any agreement that could ease sanctions on Russia should boost the amount of Russian oil available for export to global markets.
Reuters reported that Russia said it expects to continue supplying oil to India despite warnings from the US, citing Russian embassy officials in New Delhi on Wednesday, adding it hopes trilateral talks will soon take place with India and China.
India bought Russian oil for September and October delivery, resuming purchases after discounts widened.