Oil prices advanced on Wednesday (Oct. 8), as traders bet that stalled peace efforts in Ukraine would keep sanctions on Moscow intact and data showed an uptick in U.S. fuel consumption.
Brent crude futures gained 91 cents, or 1.4 percent, to reach US$66.36 a barrel at 1:13 p.m. EDT (1713 GMT), while U.S. West Texas Intermediate (WTI) climbed 99 cents, or 1.6 percent, to $62.72, putting both benchmarks on track for their strongest closes since late September.
The rally came as hopes for a breakthrough in Ukraine peace talks faded. A senior Russian diplomat said on Wednesday that momentum following the August meeting between Presidents Vladimir Putin and Donald Trump in Anchorage had “largely exhausted itself.” Analysts noted that any credible peace deal would likely pave the way for more Russian crude to reach world markets.
According to U.S. government data, Russia was the world’s second-largest oil producer in 2024, trailing only the United States. Despite sanctions, Deputy Prime Minister Alexander Novak told the Interfax news agency that Russian output was approaching its OPEC+ quota last month.
Moscow’s energy sector under pressure, stronger US demand
Russia’s oil and gas industry has faced heavy strain in recent months from repeated Ukrainian drone strikes on refineries and fuel depots, reducing refining capacity and tightening global supplies. Still, the OPEC+ alliance — which groups the Organization of the Petroleum Exporting Countries with allies such as Russia — announced on Sunday (Oct. 5) only a modest 137,000-barrel-per-day production increase for November.
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“The bare minimum that OPEC+ decided to get away with on Sunday still provided some support,” Tamas Varga, an analyst at PVM Oil, wrote in a note.
Traders also took encouragement from signs of firm demand in the United States, even as inventories rose more than expected. The U.S. Energy Information Administration (EIA) reported that crude stocks climbed 3.7 million barrels for the week ending October 3, exceeding both analyst forecasts and private estimates from the American Petroleum Institute.
However, total U.S. petroleum products supplied — a proxy for domestic consumption — jumped to 21.99 million barrels per day, the highest level since December 2022.
“The demand numbers are pretty strong and that should keep the market supported,” said Phil Flynn, senior analyst at Price Futures Group.
Investor sentiment was also buoyed by expectations that the Federal Reserve would continue cutting interest rates amid a protracted U.S. government shutdown. Markets are pricing in a 25-basis-point rate cut at the Fed’s Oct. 28–29 meeting, which could lower borrowing costs and boost oil demand.
Oil futures have risen roughly three percent so far this week (as of Oct. 8), underpinned by geopolitical tensions and cautious production policy from OPEC+.
Reuters contributed to this report.
