Oil prices edged lower on Wednesday, pressured by signs of swelling crude supplies in the United States—the world’s largest oil consumer—after an industry report pointed to another build in inventories. Still, the drop was contained as traders monitored the impact of fresh U.S. sanctions on Russian crude flows.
By 07:30 GMT, Brent crude futures were down 22 cents, or 0.3%, at $64.67 a barrel, following a 1.1% rise the previous day. U.S. West Texas Intermediate (WTI) slipped 17 cents, or 0.3%, to $60.57, after gaining 1.4% on Tuesday.
Late Tuesday, market sources citing American Petroleum Institute (API) data said U.S. crude and product stocks had increased again last week. Crude inventories climbed by 4.45 million barrels, while gasoline rose 1.55 million barrels and distillates were up 577,000 barrels, according to the API.
ING’s commodities team said the figures were “overall […] relatively bearish,” but also emphasized, “Market participants appear more concerned about supply risks than the odds of a surplus going forward.”
A new round of U.S. sanctions targeting Russia’s Rosneft and Lukoil requires businesses to end dealings with the companies by November 21, raising the prospect of tighter supply. On Monday, the U.S. Treasury said the measures—already reducing Moscow’s oil income—were expected to dent export volumes further. Buyers in China and India have reportedly begun shifting orders to other producers.
Emril Jamil, senior oil analyst at LSEG, noted that “Benchmark prices are rangebound, with the market eyeing the (November 21) sanctions’ impact, though there are downward pressures in the background with oversupply sentiment.”
Prices had firmed on Tuesday as investors considered the effect of sanctions and a series of Ukrainian strikes on Russian refineries and port terminals, raising concerns about potential disruptions to crude and fuel flows.
However, analysts continue to warn that global production remains above current demand, keeping a cap on any sustained rally.
Refined product markets have tightened, especially in Europe, where diesel crack spreads surged on Tuesday to their highest level since September 2023 following Ukrainian attacks that added pressure to global refining systems.
Analysts at Haitong Futures said, “Oil prices have found support from the strong diesel market but the persistent crude oversupply is keeping investors cautious about chasing further gains in crude.”
The market now awaits official U.S. government inventory figures due later Wednesday. A Reuters poll of eight analysts forecasts a 600,000-barrel draw in crude stocks for the week ending November 14.