Crude oil benchmark prices held steady on Wednesday as investors weighed potential progress on US-mediated Russia-Ukraine peace talks against ongoing Middle East tanker strikes and a larger-than-expected drawdown in US crude inventories.
📌 Key Price Action & Market Data:
• Brent & WTI Benchmarks: Brent crude rose $0.27 (0.2%) to $109.04/bbl (after touching five-month highs near $112 earlier), while US WTI dipped $0.11 (0.1%) to $97.72/bbl.
• US Inventories (3.06M Barrel Draw): EIA data showed US commercial crude stocks fell by 3.06 million barrels to 412.5 million barrels last week—far exceeding analyst expectations for an 820,000-barrel draw.
• Distillate Stocks (+1.68M Barrels): Distillate inventories (diesel and heating oil) rose 1.68 million barrels to 104.3 million, defying forecasts for a 1.16M barrel decline.
• US-Russia Diplomatic Push: Kremlin officials confirmed President Vladimir Putin agreed to resume US-mediated peace talks with Ukraine next month following meetings with US envoy Steve Witkoff.
• Escalating Gulf Risks: At least 18 vessel attacks were recorded in the past two weeks via Kpler data, with ongoing strikes in the Strait of Hormuz and Gulf of Oman keeping risk premiums intact.
• Emergency Heating Oil Loan: The US DOE is offering to loan up to 315,000 barrels (~1/3 of the US emergency heating oil reserve) to alleviate tight distillate supply and contain winter price spikes.
💡 Market Takeaway: Oil markets are locked in a tug-of-war: headline progress on Ukraine peace talks provides a bearish ceiling on diesel supply fears, while ongoing Middle East maritime disruptions and declining US crude stockpiles maintain a solid price floor above $100/bbl.