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Oil prices rose on Wednesday, with Brent crude climbing above $70 per barrel and West Texas Intermediate reaching around $67. Two main factors supported this increase:
First, the US Energy Information Administration significantly lowered its forecast for global oil oversupply. The agency reduced its prediction for 2025 and cut its 2026 surplus outlook in half, based on expectations that Iran and Venezuela will produce less oil.
Second, February’s US inflation report showed consumer prices rising at their slowest pace in four months. This positive economic news boosted investor confidence in riskier assets like oil after months of disappointing inflation data.
These developments helped oil recover from Tuesday’s early losses, despite ongoing concerns about President Trump’s tariff announcements. Oil prices have been falling since their mid-January peak due to tariff confusion, OPEC+ plans to increase production, and weakening demand from China.
Industry data showed US commercial oil inventories increased by 4.2 million barrels last week, though the important Cushing, Oklahoma storage hub reported its first decrease in five weeks. On the geopolitical front, Ukraine has accepted a US-proposed 30-day ceasefire with Russia, while Yemen’s Houthi rebels plan to resume attacks on Israeli ships for the first time in about two months.
