Oil prices climbed 3% on Wednesday as geopolitical tensions and fresh trade developments supported a rebound, though gains were capped by an unexpected rise in U.S. crude inventories. Brent crude rose $2.00 to settle at $69.11 a barrel, while U.S. West Texas Intermediate (WTI) also gained $2.00 to end the session at $67.45.
The upward momentum came as Iran suspended cooperation with the International Atomic Energy Agency, adding a layer of geopolitical risk to the market. Although no physical supply disruptions occurred, analysts said the move reintroduced a sentiment-driven risk premium. Additionally, a last-minute U.S.-Vietnam trade deal helped fuel broader risk appetite in markets, contributing to oil’s climb.
However, price gains were tempered after the U.S. Energy Information Administration reported a 3.8 million-barrel build in domestic crude stocks, countering analyst expectations for a drawdown. Gasoline demand also slipped to 8.6 million barrels per day, falling short of seasonal norms and raising concerns about summer driving activity.
OPEC+ supply increases appeared largely priced in, with the group expected to approve a 411,000 bpd production hike for August. Saudi Arabia notably boosted exports by 450,000 bpd in June, but overall OPEC+ volumes remain relatively stable since March. Analysts expect modest increases through summer to meet elevated demand.
Markets now turn to Thursday’s U.S. employment report, which could influence expectations for Federal Reserve rate cuts. Lower interest rates may provide a future boost to oil demand by supporting economic activity.