Oil prices rise after three-day slump as US inventories fall

SINGAPORE: Oil prices inched higher on Wednesday after three straight sessions of declines, supported by a sharp drop in US crude and fuel inventories. However, the gains were limited as traders weighed fresh sanctions on Russia against talk of a possible output increase by OPEC+.

Inventory draw sparks limited rebound

Brent crude gained 20 cents to trade at $64.60 a barrel by 0203 GMT, while US West Texas Intermediate (WTI) rose 18 cents to $60.33.

Market data showed that US crude stocks fell by about 4 million barrels during the week ending October 24, according to figures from the American Petroleum Institute. Gasoline inventories were also down by over 6 million barrels, while distillate supplies dropped by more than 4 million barrels.

Analysts said the larger-than-expected draws gave the market a short-lived boost. “The surprise draws on inventory helped lift prices this morning, but the broader picture remains mixed,” said Priyanka Sachdeva, a senior market analyst at Phillip Nova. “The sanctions and supply story may support prices, but weak demand and spare capacity still limit upside.”

Sanctions and supply worries dominate sentiment

Oil markets remain caught between opposing forces. On one hand, the United States has tightened sanctions on Russia, targeting energy giants Lukoil and Rosneft for the first time during President Donald Trump’s second term. The move pushed prices up last week, with both Brent and WTI logging their biggest weekly gains since June.

However, doubts persist over whether the sanctions will meaningfully reduce Russian exports. The Kremlin said its energy remained competitively priced and that partner countries were free to decide whether to buy. In India, several refiners have paused new Russian oil orders while awaiting government guidance, though state-run Indian Oil said it would continue purchases as long as they comply with sanctions.

Meanwhile, Germany confirmed that Rosneft’s former German assets would be exempt from US restrictions, as they are no longer under Russian control.

OPEC+ mulls production boost

Adding to the uncertainty, OPEC+ is reportedly considering a modest increase in production in December. Four sources familiar with the talks told Reuters that the group may add around 137,000 barrels per day, a move that could weigh on prices if demand fails to recover.

While Wednesday’s early rebound offered some relief after three days of losses, traders remain cautious. With competing headlines about sanctions, supply changes and slowing global demand, the oil market appears headed for another volatile week.