Oil prices edged lower on Wednesday, extending a three-day slide as traders reassessed the impact of sanctions on Russian energy exports and weighed the possibility of an OPEC+ output increase. Brent crude futures dipped 7 cents, or 0.11%, to $64.33 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 7 cents, or 0.12%, to $60.08 in early trading.
The modest decline in oil prices follows last week’s sharp rally, Brent and WTI posted their biggest weekly gains since June after U.S. President Donald Trump imposed Ukraine-related sanctions on Russian oil giants Lukoil and Rosneft. However, market sentiment has since cooled amid concerns that Russia may circumvent restrictions by offering discounted crude and leveraging shadow fleets to maintain exports.
U.S. inventory data added a layer of complexity. According to figures from the American Petroleum Institute, crude stocks fell by 4.02 million barrels for the week ended October 24, while gasoline inventories dropped by 6.35 million barrels and distillates by 4.36 million barrels. The larger-than-expected draws triggered a short-lived price surge during Tuesday’s session and supported early gains on Wednesday.
“The surprise draws helped oil prices this morning, but the interplay of sanctions risks and OPEC+’s posture is driving markets,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. She cautioned that while supply-side narratives have lifted prices, demand remains soft and spare capacity continues to weigh on the outlook.
Read: Oil prices dip as OPEC+ output plans and Russia sanctions reshape market sentiment
OPEC+ Output Weighing Heavily on Oil Prices.
OPEC+ is reportedly leaning toward a modest output boost in December, with sources citing a potential increase of 137,000 barrels per day. This comes as Saudi Aramco’s CEO reaffirmed strong global demand, noting that Chinese consumption remains healthy even amid geopolitical tensions.
Meanwhile, Indian refiners are navigating the sanctions landscape with caution. Several have paused new orders for Russian oil pending government guidance, though state-run Indian Oil has confirmed it will continue purchases as long as they comply with international restrictions. Germany’s economy minister also stated that Rosneft’s German assets would be exempt from U.S. sanctions, given their change in ownership.
Market participants are eyeing two key events which will likely impact oil prices: the upcoming Federal Reserve rate decision and a scheduled U.S.-China leaders’ meeting. Both could influence broader economic sentiment and, by extension, energy demand forecasts. Haitong Securities noted in a briefing that these developments may offer support to oil markets entering the second half of the week.
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