Oil prices edge up on worries about Russian output, higher US demand
Oil prices edged up about 1% to a one-week high on Wednesday as traders expected a lack of progress on a Ukraine peace deal to keep sanctions in place against Moscow, while a weekly report showed growing U.S. oil consumption.
Brent crude futures rose 80 cents, or 1.2%, to settle at $66.25 a barrel. U.S. West Texas Intermediate (WTI) crude rose 82 cents, or 1.3%, to settle at $62.55.
That was the highest close for Brent since September 30 and for WTI since September 29.
A top Russian diplomat said the impetus to reach a peace deal with Ukraine was largely exhausted.
Analysts have said a peace deal would likely allow more Russian oil to flow to global markets. Russia was the second-biggest crude producer in the world after the U.S. in 2024, according to U.S. energy data.
Despite sanctions, Russia has been gradually raising oil production and was close last month to meeting its OPEC+ output quota, Deputy Prime Minister Alexander Novak said on Wednesday, the Interfax news agency reported.
OPEC+ includes the Organization of the Petroleum Exporting Countries and allies like Russia.
Moscow’s energy sector has been under serious strain in the past two months due to a wave of Ukrainian drone attacks, mainly targeting oil refineries.
Also supporting crude futures, investors expected the U.S. Federal Reserve to keep cutting interest rates. Investors have been without most U.S. economic data during a U.S. government shutdown.
Fed officials agreed at their recent policy meeting that risks to the U.S. job market had grown enough to warrant an interest rate cut, but many remained wary of high inflation, minutes of the September 16-17 session showed.
The central bank is widely expected to cut rates by 25 basis points at its October 28-29 meeting, according to the CME Group’s FedWatch Tool.
Lower interest rates can boost economic growth and demand for oil.
Source: Reuters
