Crude Oil Prices Climb in Asia on Surprise U.S. Inventory Drop

Crude Oil prices edged higher during Asian trading hours on Wednesday, buoyed by a steeper-than-expected decline in U.S. crude stockpiles and renewed diplomatic activity around the Russia-Ukraine conflict that could reshape global energy supply and sanctions policy.

As of 21:33 ET (01:33 GMT), Brent crude futures for October delivery rose 0.4% to $66.02 per barrel, while West Texas Intermediate (WTI) crude gained 0.3% to $61.94.

The modest rebound followed Tuesday’s decline, when news of potential Russia-Ukraine peace negotiations triggered concerns of a supply glut, particularly as the market contends with rising output from the OPEC+ alliance.

U.S. Crude Inventories Decline Sharply – API

According to the American Petroleum Institute (API), U.S. crude inventories fell by 2.4 million barrels for the week ending August 15, significantly outpacing analyst expectations of a 1.2 million-barrel draw. The drop follows a 1.5 million-barrel build the previous week and lent fresh support to oil prices amid broader supply concerns.

Focus Shifts to Russia-Ukraine Peace Prospects

Geopolitical developments also caught traders’ attention. President Donald Trump announced on Tuesday that he had spoken with Russian President Vladimir Putin after hosting Ukrainian President Volodymyr Zelenskiy and European leaders at the White House on Monday. Trump revealed plans to facilitate direct talks between Moscow and Kyiv, potentially followed by a trilateral summit involving the U.S.

While Trump promised U.S. support for Ukraine’s security as part of any peace arrangement, he did not detail what such guarantees would entail. Zelenskiy welcomed the diplomatic move, calling it “a major step forward,” and expressed willingness to engage in direct negotiations with Russia.

Markets are closely watching for signs that any breakthrough could lead to an easing of Western sanctions on Russian oil exports. Despite ongoing restrictions, Russia remains a key player in global crude supply, and any shift in sanctions could significantly affect market dynamics.

Also Read: Gifty Nifty Indicates a Soft Start for NSE and BSE on Aug 20

In addition to Middle East and European developments, traders are also tracking the outcome of U.S.-India talks. The Biden administration is set to implement a new round of 25% tariffs on Indian goods starting August 27, in response to India’s continued imports of Russian crude. The decision has added another layer of uncertainty to an already volatile energy market.

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