Oil prices rebounded nearly 1% on Wednesday as traders weighed strong U.S. demand signals against easing geopolitical tensions in the Middle East. Brent crude rose 54 cents, or 0.8%, to settle at $67.68 a barrel, while U.S. West Texas Intermediate (WTI) gained 55 cents, or 0.9%, to close at $64.92. The gains followed steep declines earlier in the week, when both benchmarks fell around 13% on signs of a truce between Israel and Iran.
Although the ceasefire reduced fears of immediate supply disruptions, analysts noted that risks have not entirely disappeared. Attention shifted to the demand side, as U.S. government data showed crude inventories dropped by 5.8 million barrels—well above expectations for a 797,000-barrel draw. Gasoline stocks also fell unexpectedly by 2.1 million barrels, driven by the highest gasoline demand since December 2021.
Analysts suggested the strong inventory draws helped refocus the market on fundamentals rather than geopolitical concerns. Meanwhile, expectations for a U.S. Federal Reserve rate cut later this year gained traction after mixed macroeconomic data raised concerns about slowing growth. Lower rates could support economic activity and bolster oil demand.
With prices stabilizing after sharp swings, analysts see crude consolidating in the $65–$70 range as markets monitor Fed policy and global demand indicators.