Oil prices rise to $63.79 on larger-than-expected decline in U.S. crude stocks

Oil prices rose on Thursday, recovering from the previous session’s decline, following a sharper-than-anticipated drop in U.S. crude inventories. However, market worries lingered concerning a potential U.S.-led effort to resolve the Russia-Ukraine war, which could inject additional barrels into an already well-supplied market.

As of 5:41 GMT, Brent crude futures added 28 cents, or 0.44 percent, to reach $63.79 a barrel, while U.S. West Texas Intermediate gained 27 cents, or 0.46 percent, to $59.52.

U.S.-led effort to resolve the Russia-Ukraine war pressure prices

The uptick in oil prices comes after both benchmarks slumped 2.1 percent on Wednesday. The move followed reports indicating that Washington had urged Kyiv to accept a U.S.-crafted proposal to end the war with Russia.

Prices had come under pressure on fears that a resolution to the conflict could lift sanctions on Russian crude, releasing additional supply at a time when oil supply is already building up and major producers have raised their output quotas.

The decline in oil prices also came on the heels of data from the American Petroleum Institute, which reported a 4.4-million-barrel increase in U.S. commercial crude inventories last week. Gasoline stocks rose by 1.55 million barrels, and distillate inventories were up by 577,000 barrels over the same period.

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Larger-than-anticipated decline in U.S. crude inventories supports oil

Offering some support to the market was a larger-than-anticipated decline in U.S. crude inventories, which underscored stronger refinery activity driven by healthy margins in the world’s largest oil consumer, as well as steady export demand for American crude. According to the latest EIA data, crude stocks fell by 3.4 million barrels to 424.2 million in the week ending November 14, well beyond the 603,000-barrel expected decline.

Still, analysts noted that U.S. gasoline and distillate inventories rose for the first time in more than a month, hinting at a softening in fuel consumption.

The market is also watching for the effects of a November 21 deadline imposed by the United States for companies to halt dealings with Rosneft and Lukoil, Russia’s two largest oil producers and exporters. Both firms were targeted under U.S. sanctions aimed at pressuring Moscow to end the war in Ukraine.

The U.S. Treasury Department noted that existing sanctions are already constraining Russia’s oil revenues and are expected to gradually suppress its export volumes, prompting some buyers in China and India to turn to other suppliers. At the same time, analysts caution that global oil production continues to outpace consumption, a dynamic that is exerting additional downward pressure on prices.

In Europe, diesel refining margins have jumped to their highest level since September 2023 after Ukrainian attacks on Russian energy and port facilities disrupted fuel shipments. The surge underscores a broader rise in refinery profitability across global markets.