Oil prices dropped to two-month lows on Wednesday as a surprise increase in U.S. fuel stockpiles signaled weakening demand, while ongoing Russia-Ukraine peace negotiations continued to pressure prices. Brent fell to $72.54 (-0.67%), and WTI dropped to $68.62 (-0.45%) by early afternoon
.
The U.S. Energy Information Administration reported unexpected builds in gasoline and distillate inventories, even as crude stockpiles declined due to higher refining activity. Analysts noted a sharp initial decline in oil prices following the report, though the crude draw was larger than expected.
Markets remain focused on potential geopolitical shifts, as improving prospects for a Russia-Ukraine peace deal raise the likelihood of Russian sanctions being lifted, reducing supply uncertainty. Meanwhile, a draft minerals deal between the U.S. and Ukraine could further reshape global trade dynamics.
Additional downward pressure on oil comes from Trump’s policies, including support for increased Iraqi oil exports and tariff measures that could trigger a trade war, potentially slowing economic growth and energy demand. Despite fresh U.S. sanctions on Iran, analysts note that concerns over a global economic slowdown are overshadowing near-term supply risks.