Oil prices slipped on Wednesday, retreating more than 1% after data showed an unexpected build in U.S. crude inventories.
However, the losses were tempered by remarks from the U.S. Treasury Secretary, who suggested that President Donald Trump might use sanctions as leverage in an upcoming meeting with Russian President Vladimir Putin.
Brent crude futures on Wednesday morning fell 80 cents, or 1.2%, to $65.32 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped 92 cents, or 1.5%, to $62.25.
Figures from the U.S. Energy Information Administration (EIA) revealed that crude stocks rose by 3 million barrels to 426.7 million last week. Analysts surveyed by Reuters had anticipated a decline of about 275,000 barrels. The data also showed net U.S. crude imports climbing by 699,000 barrels per day.
“These crude exports remain subpar from what we got used to, falling due to tariff pushback,” said John Kilduff, partner at Again Capital in New York, noting that weaker exports could continue to pressure prices.
The International Energy Agency (IEA) on Wednesday raised its forecast for global oil supply growth for the year but revised down its demand outlook.
Trump is scheduled to meet Putin in Alaska on Friday to discuss ending Russia’s war in Ukraine—a conflict that has unsettled oil markets since February 2022.
Speaking to Bloomberg Television, U.S. Treasury Secretary Scott Bessent said Washington could increase sanctions or impose secondary tariffs if the talks fail, urging European leaders to adopt similar measures. “He will make it clear to President Putin that all options are on the table,” Bessent said.
Meanwhile, OPEC+ in its Tuesday report raised its forecast for global oil demand next year while trimming expectations for supply growth from the U.S. and other non-member producers—signalling a potentially tighter market ahead.
“Were we to take an aggregate of the respective IEA and OPEC oil demand growth projections for 2025 at their respective bearish and bullish ends, even a modest middle figure, say just north of 1 million bpd, can easily be serviced by non-OPEC supply growth alone at the moment,” said independent energy analyst Gaurav Sharma. “So, I don’t see a bullish case for oil over the near-term horizon.”
