Oil prices ticked up slightly on Wednesday after three consecutive days of decline, lifted by a sharp drawdown in US crude inventories.
However, lingering concerns over potential OPEC+ production increases and ongoing uncertainty surrounding US sanctions on Russia tempered gains.
In early Asian trading today, Brent crude futures rose 20 cents, or 0.31 per cent, to $64.60 per barrel, while US West Texas Intermediate (WTI) futures climbed 18 cents, or 0.3 per cent, to $60.33, reported Reuters.
The modest rebound followed fresh data from the American Petroleum Institute (API), which revealed a larger-than-expected fall in US oil stockpiles.
Citing market sources, the media agency reported that the US crude inventories dropped by 4.02 million barrels for the week ending October 24.
Gasoline stocks plunged by 6.35 million barrels, and distillate inventories declined by 4.36 million barrels over the same period. The steep inventory drawdown triggered a brief rally during the previous trading session, with analysts suggesting the data reflected stronger refinery runs and export demand.
Haitong Securities noted that the surprising decline in inventories offered short-term price support. “The interplay of sanctions risks and OPEC+’s posture is driving markets right now,” said Priyanka Sachdeva, Senior Market Analyst at Phillip Nova. “That doesn’t mean the rally has unlimited upside, because while the supply-side story is strong, the demand side still shows softness, and spare capacity remains.”
Sanctions and Market Jitters
Last week, Brent and WTI recorded their biggest weekly gains since June after US President Donald Trump announced Ukraine-related sanctions on Russia, targeting major oil producers Lukoil and Rosneft. However, the boost was short-lived.
Traders grew cautious amid doubts that sanctions would meaningfully restrict global supply, given the market’s surplus capacity and expectations of an upcoming OPEC+ output increase.
On Tuesday, the Kremlin reiterated that Russia continued to offer “top-quality energy at a good price,” saying it was up to its trading partners to decide whether to buy Russian oil amid tightening sanctions.
The statement came as several Indian refiners paused new orders for Russian crude, awaiting clarity from New Delhi and global suppliers. Some refiners, according to industry sources, have turned to the spot market for alternatives.
State-run Indian Oil Corporation, however, confirmed it would continue purchasing Russian oil as long as its trade complied with existing sanctions. Meanwhile, Germany’s economy minister said the US had provided written assurances that Rosneft’s German subsidiary would be exempt, as those assets were no longer under Russian control.
OPEC+ and Global Demand Outlook
OPEC+, the world’s largest coalition of oil-producing nations, is reportedly leaning towards a modest production boost in December. Four sources familiar with the discussions said the increase could be around 137,000 barrels per day. The decision, if confirmed, would mark a cautious step by the group as it balances supply management against recovering global demand.
Adding to market sentiment, Saudi Aramco’s Chief Executive Officer said on Tuesday that crude demand had remained strong even before the latest sanctions, with Chinese consumption levels still showing resilience. This confidence, analysts say, reflects steady industrial recovery and increased travel demand in key Asian markets.
