Oil prices edged higher in Asian trading on Wednesday following industry reports that U.S. crude inventories fell more than anticipated, while traders also considered the potential impact of renewed Russia-Ukraine peace discussions on supply and sanctions.
As of 21:33 ET (01:33 GMT), October Brent crude futures gained 0.4% to $66.02 per barrel, and West Texas Intermediate (WTI) futures rose 0.3% to $61.94 per barrel. Both benchmarks had dropped on Tuesday, amid worries that a possible peace deal could trigger a surge in supply at a time when markets are already adjusting to OPEC+ production increases.
U.S. crude inventories decline sharply
The American Petroleum Institute (API) reported that U.S. crude oil stocks decreased by 2.4 million barrels in the week ending August 15, surpassing analysts’ expectations of a 1.2 million-barrel drop. This followed a 1.5 million-barrel increase the previous week. The larger-than-expected draw provided a boost to oil prices, highlighting tighter supply conditions.
Russia-Ukraine peace talks in the spotlight
On Tuesday, former President Donald Trump said he had spoken with Russian President Vladimir Putin after hosting Ukrainian President Volodymyr Zelenskiy and European leaders at the White House on Monday. Trump indicated that he was working to arrange direct talks between Moscow and Kyiv, with the possibility of a subsequent trilateral summit involving the United States.
Trump stated that the U.S. would help ensure Ukraine’s security under any peace agreement, though details on the form or scope of these guarantees were not provided. Zelenskiy described the announcement as “a major step forward” and expressed willingness to engage in direct negotiations with Russia.
Traders are closely monitoring whether a formal peace framework could result in the relaxation of Western sanctions on Russian oil exports. Russia continues to be a major global oil supplier, but sanctions have restricted its flows to Western markets since the invasion of Ukraine.
Market participants are also awaiting clarification on secondary U.S. tariffs of 25% on Indian goods, imposed due to New Delhi’s purchase of Russian oil, which are scheduled to take effect on August 27.
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