Oil Prices Slip on Russian Sanctions Doubts and OPEC+ Supply Talk
Oil prices edged lower on Wednesday, extending a three-day decline as markets questioned the impact of U.S. sanctions on Russia and anticipated a possible OPEC+ output increase.
Brent crude futures fell by 7 cents (0.11%) to $64.33 a barrel at 04:11 GMT, while U.S. West Texas Intermediate (WTI) crude slipped 7 cents (0.12%) to $60.08.
U.S. Oil Inventories Drop Sharply
According to data from the American Petroleum Institute (API), U.S. crude, gasoline, and distillate inventories all fell last week. Crude stocks dropped by 4.02 million barrels for the week ending October 24. Gasoline reserves declined by 6.35 million barrels, and distillate stocks were down by 4.36 million barrels.
These larger-than-expected inventory draws supported a brief rally in oil prices during Tuesday’s trading session and early Wednesday morning.
Analysts See Limited Upside Amid Mixed Signals
Priyanka Sachdeva, senior market analyst at Phillip Nova, noted that the unexpected drop in inventories temporarily boosted sentiment. However, the market remains cautious.
“The rally doesn’t have unlimited upside. While supply concerns are growing, demand still shows signs of weakness, and spare capacity remains,” Sachdeva said.
Sanctions and Supply Outlook Pressure Oil Markets
Last week, Brent and WTI recorded their largest weekly gains since June after President Donald Trump imposed Ukraine-related sanctions on major Russian oil companies, Lukoil and Rosneft.
However, analysts doubt that these sanctions will significantly reduce global supply. Ongoing discussions within OPEC+ about increasing production continue to weigh on prices. Both benchmarks fell around 1.9% in the previous session.
Russia and India React to U.S. Sanctions
The Kremlin stated on Tuesday that Russia continues to offer high-quality energy at competitive prices, leaving it to partners to decide whether to continue purchases.
In India, several refiners have paused new Russian oil orders, awaiting government guidance. Some have shifted to the spot market for alternative supplies. Meanwhile, state-run Indian Oil confirmed it will keep buying Russian crude as long as it complies with international rules.
Germany’s economy minister said the U.S. granted written assurances exempting Rosneft’s German operations from sanctions, as those assets are no longer under Russian control.
OPEC+ Eyes Small Output Boost
Sources familiar with internal talks revealed that OPEC+ is considering a modest output increase in December, potentially adding around 137,000 barrels per day.
Saudi Aramco’s CEO said global crude demand remains strong, noting that Chinese consumption continues to be solid even after sanctions were announced against Russian oil firms.
Market Awaits Fed and Trump-Xi Meetings
Looking ahead, investors are monitoring two major events that could shape energy market sentiment — the Federal Reserve’s interest rate decision and the upcoming meeting between President Trump and Chinese President Xi Jinping.
According to Haitong Securities, both developments could help support prices if they ease global growth concerns and stabilize financial markets.
