Oil prices remained stable as industry data indicated a significant drop in US crude inventories, while markets assessed the impact of a potential ceasefire between Russia and Ukraine in the Black Sea.
Brent crude traded above $73 per barrel after closing nearly unchanged on Tuesday, while West Texas Intermediate (WTI) hovered near $69. According to the American Petroleum Institute (API), US crude stockpiles fell by 4.6 million barrels last week, marking the largest draw since November if confirmed by official government data set for release on Wednesday.
Meanwhile, the US announced that Russia and Ukraine had reached an agreement to ensure safe navigation in the Black Sea. However, the Kremlin stated that its participation would be contingent on conditions such as sanctions relief. Leading global energy traders have indicated they may resume business with Russia if these restrictions are lifted.
Warren Patterson, head of commodities strategy at ING Groep NV in Singapore, suggested that easing sanctions on Russia would not necessarily lead to a major increase in oil supply. “Russia has successfully rerouted its oil exports in recent years,” he noted.
Despite recent stability, oil prices remain more than 10% lower than their peak in mid-January. Market volatility has been fueled by tariffs imposed by the Trump administration and retaliatory actions from affected nations. Additional levies, including a duty on Venezuelan crude and gas imports, are set to take effect next week.
Traders have been actively purchasing bullish oil options to hedge against the risk of US sanctions triggering price surges. Meanwhile, former President Donald Trump has reiterated his commitment to applying “maximum pressure” on Iran to restrict its crude exports.
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