West Texas Intermediate (WTI) crude oil futures fell by over 2% to $59.3 per barrel on Wednesday, following reports about the United States' efforts to mediate an end to the conflict between Russia and Ukraine. A Ukrainian representative mentioned that Kyiv had received "signals" of proposals from the US to resolve the conflict, sparking optimism for a revival of diplomatic talks. On the other hand, Russia announced that sanctions imposed on its major oil companies, Rosneft and Lukoil, have not affected their production levels.
From the supply perspective, data from the Energy Information Administration revealed that US crude oil inventories decreased more significantly than anticipated, with a reduction of 3.4 million barrels, bringing total stocks down to 424.2 million barrels for the week ending November 14. During the same period, inventories of gasoline and distillates saw an increase. The crude stockpile at the Cushing, Oklahoma, delivery point also saw a decline of 698,000 barrels.
The previous day, the American Petroleum Institute (API) reported a 4.4-million-barrel rise in US crude inventories, marking a five-month peak. Additionally, geopolitical tensions are escalating, highlighted by Iran's temporary seizure of a tanker near the Strait of Hormuz and the US's reinforcement of military presence in proximity to Venezuela.
