Oil prices continued to rise on Wednesday after the US imposed sanctions on Russian oil companies in retaliation for the Ukraine discrepancy.
Supply concerns increased on Wednesday due to news that the summit between Trump and Russian President Vladimir Putin had been suspended, as well as pressure from Western governments on Asian buyers to reduce their purchases of Russian oil.
Brent crude futures traded at $64.35, up $3.03, or 4.94%, after the settlement at 10:00 PM GMT. WTI crude futures traded at $59.92, up $1.42, or 2.43%.
Earlier, Brent crude futures closed at $62.59 a barrel, up $1.27, or 2.07%, while WTI crude futures rose $1.26, or 2.20%, to $58.50.
The US has imposed sanctions on major Russian oil companies, while the EU has banned Russian LNG. The new sanctions target two of Russia’s largest oil companies, Lukoil and Rosneft. The US is imposing sanctions on Russia’s two largest oil companies, which the Kremlin sees as financing its war machine.
Industry sources said on Thursday that Indian refiners are preparing to significantly curb Russian oil imports following new sanctions aimed at squeezing Moscow’s revenues to finance the US war in Ukraine.
The Energy Information Administration (EIA) said on Wednesday that US crude, gasoline, and distillate inventories fell last week as refinery activity and demand strengthened. Oil prices have also been supported by rising US energy demand.
US crude inventories fell by 961,000 barrels last week to 422.8 million barrels. This figure was contrary to analysts’ expectations for a 1.2 million barrel increase.
During the mid-season, which typically runs from late September to November, energy demand is relatively low, but data suggest that demand for oil remains strong.
Trump said on Monday that he hopes to reach a fair trade agreement with Chinese President Xi Jinping, who is expected to meet in South Korea next week.
Investors are closely monitoring the progress of US-China trade talks, with officials from both countries meeting in Malaysia this week.
Reports indicate that the US and India are close to finalizing a trade agreement that could gradually reduce India’s imports of Russian crude, potentially boosting demand for other types of oil.
India’s Mint newspaper reported on Wednesday that the two countries are close to a long-stalled trade agreement that would reduce US tariffs on Indian imports from 50% to 15-16%.
Meanwhile, fuel imports to the U.S. Gulf Coast reached a two-and-a-half-year high in September, driven by a surge in cargoes from the Middle East as refiners search for alternatives to dwindling Venezuelan crude supplies, according to preliminary ship tracking data, analysts, and a refinery source.