Brent crude futures rose 80 cents, or 1.22%, to close at $66.25 a barrel. U.S. West Texas Intermediate crude climbed 82 cents, or 1.33%, to settle at $62.55.
In Russia, a top Russian diplomat said the impetus to reach a peace deal with Ukraine, which emerged after a summit between Russian President Vladimir Putin and U.S. President Donald Trump in August, had proven to be largely exhausted.
Analysts have said a peace deal would likely allow more Russian oil to flow to global markets. Russia was the second-biggest crude producer in the world after the U.S. in 2024, according to U.S. energy data.
Despite sanctions, Russia has been gradually raising its oil production and was close last month to meeting its OPEC+ output quota, Deputy Prime Minister Alexander Novak said on Wednesday, the Interfax news agency reported.
OPEC+ includes the Organization of the Petroleum Exporting Countries and allies like Russia.
Moscow’s energy sector has been under serious strain in the past two months due to a wave of Ukrainian drone attacks on its oil and gas infrastructure, mainly targeting oil refineries.
Another factor supporting crude futures was investor belief that the U.S. Federal Reserve would keep cutting interest rates amid a prolonged U.S. government shutdown.
Investors have been without most U.S. economic data as the federal government remains shut. But, the Fed will release minutes from its September meeting at 2 p.m. EDT on Wednesday, which will be scoured for any new clues on Fed policy.
The central bank is widely expected to cut rates by 25 basis points at its October 28-29 meeting, according to the CME Group’s FedWatch Tool.
Central banks, like the Fed, use interest rates to control inflation. Lower rates reduce consumer borrowing costs and can boost economic growth and demand for oil.
Oil markets held gains as traders focused more on a U.S. report showing an increase in oil consumption last week than the bigger-than-expected increase in crude inventories.
The U.S. Energy Information Administration (EIA) said energy firms added 3.7 million barrels of crude into inventories during the week ended October 3. ,
That was more than the 1.9-million-barrel build analysts forecast in a Reuters poll and the 2.8-million-barrel build market sources said the American Petroleum Institute (API) trade group cited in its figures on Tuesday.
EIA, however, did say that total weekly petroleum products supplied, a proxy for U.S. oil consumption, rose last week to 21.990 million barrels per day, the most since December 2022.
“The demand numbers are pretty strong and that should keep the market supported,” said Phil Flynn, a senior analyst at Price Futures Group.
Oil markets were up about 3% so far this week after OPEC+ on Sunday announced a smaller-than-expected output increase for November.
“The bare minimum that OPEC+ decided to get away with on Sunday still provided some support,” PVM oil analyst Tamas Varga said in a note on Wednesday.
OPEC+ agreed to raise its output targets for November by 137,000 barrels per day on growing concerns about a looming glut in the oil market, sources from the group told Reuters