Oil prices rose about 1% to a one-week high on Wednesday as traders bet that stalled Ukraine peace talks would keep sanctions on Moscow in place, while U.S. data showed stronger fuel consumption. Brent crude settled 80¢ higher (+1.2%) at $66.25, and WTI gained 82¢ (+1.3%) to $62.55, marking their highest closes since September 30 and 29, respectively.
A top Russian diplomat said momentum for a peace deal with Ukraine had “largely exhausted,” fueling expectations that sanctions on Moscow’s oil exports will remain intact. Despite restrictions, Russia has been slowly lifting production and was near its OPEC+ quota, Deputy Prime Minister Alexander Novak said.
OPEC+ has gradually increased output in recent months, though refinery disruptions from Ukrainian drone strikes have tightened some Russian fuel supplies.
Markets also drew support from expectations that the U.S. Federal Reserve will continue to cut interest rates following its September 16–17 reduction. Minutes from that meeting showed policymakers citing growing labor market risks, while a further 25 bps cut is widely expected at the October 28–29 session. Lower rates tend to stimulate growth and fuel demand.
U.S. inventory data painted a mixed picture. The EIA reported a 3.7 million-barrel crude build last week—above forecasts—but noted that total petroleum products supplied, a proxy for U.S. oil consumption, jumped to 21.99 million bpd, the highest since December 2022.
“The demand numbers are pretty strong and that should keep the market supported,” said Phil Flynn of Price Futures Group.