Crude oil futures added to their gains in the middle of the trading week amid a second straight drawdown in domestic inventories and geopolitical developments. Oil prices have declined this year, and industry forecasts predict a bearish trend for the remainder of 2025.
September West Texas Intermediate (WTI) crude oil futures advanced $0.56, or 0.89%, to $63.81 per barrel at 14:42 GMT on Wednesday on the New York Mercantile Exchange. US crude is down more than 11% this year.
Brent, the global benchmark for oil prices, topped $67 midweek. October Brent crude futures jumped $0.48, or 0.72%, to $67.18 a barrel on London’s ICE Futures exchange. The international benchmark is also down about 10% year-to-date.
New Energy Information Administration (EIA) data show that crude oil inventories fell by 2.392 million barrels for the week ending August 22, up from the previous week’s withdrawal of 6.014 million barrels.
The consensus estimate signaled a drawdown of two million barrels.
Gasoline stockpiles declined by a smaller-than-expected 1.236 million barrels, up from the 2.72-million-barrel drawdown of 2.72 million barrels in the previous week.
Distillate supplies dropped by 1.786 million barrels, while heating oil stocks rose by 102,000 barrels.
This comes after the American Petroleum Institute (API) reported that commercial inventories decreased by 974,000 barrels.
In addition to US inventories, financial markets are monitoring geopolitical developments.
At the Cabinet meeting on Tuesday, US special envoy Steve Witkoff stated that he will meet with Ukrainian representatives in New York. Additionally, he said, Washington officials are speaking with their Russian counterparts.
Meanwhile, President Donald Trump’s secondary tariffs of 50% on India went into effect at midnight on Wednesday. The White House has attempted to rectify the US-India trade imbalance and stop New Delhi from buying Russian crude oil.
“The secondary tariff has not been enough to stop India from buying Russian oil. Initially, secondary tariffs saw Indian refiners pause purchases. They have resumed purchases. The market will be watching Russian oil flows to India closely going forward to gauge the impact, if any, of secondary tariffs,” said ING strategists in a note.
These are part of the Trump administration’s broader efforts to end the war in Ukraine, which has lasted almost four years.
In other energy commodities, September natural gas futures surged $0.089, or 3.19%, to $2.879 per million British thermal units (Btu). September gasoline futures ticked up $0.0111, or 0.56%, to $1.9657 per gallon. September heating oil futures rose $0.0166, or 0.73%, to $2.2938 a gallon.