Oil prices experienced an uptick of approximately one per cent on Wednesday, reaching a one-week high. This increase is attributed to market expectations that the absence of progress in negotiations for a Ukraine peace agreement will maintain sanctions against Moscow. Brent crude futures rose by 80 cents, or 1.2 per cent, settling at $US66.25 a barrel. US West Texas Intermediate (WTI) crude also saw an increase of 82 cents, or 1.3 per cent, to settle at $US62.55. These were the highest closing prices for Brent since September 30 and for WTI since September 29.
A prominent Russian diplomat indicated that momentum towards a peace agreement with Ukraine has largely diminished. Analysts have suggested that a successful peace deal could potentially lead to an increased flow of Russian oil into global markets. Despite existing sanctions, Russia has been gradually increasing its oil production, nearly meeting its OPEC+ output quota last month, according to Deputy Prime Minister Alexander Novak, as reported by Interfax news agency. OPEC+ includes the Organisation of the Petroleum Exporting Countries and allies such as Russia.
Oil markets sustained their gains as traders shifted their focus to a recent US report indicating a rise in oil consumption during the past week. This outweighed concerns related to a larger-than-anticipated increase in crude inventories. The US Energy Information Administration (EIA) reported that energy firms added 3.7 million barrels of crude to inventories during the week ending October 3.
