NEW YORK: Oil prices rebounded by more than $2 a barrel in early trading on Wednesday, recovering part of the previous session’s sharp losses after industry data showed a significant decline in U.S. crude inventories, signaling tighter supplies.
Brent crude futures climbed $2.71, or 3.2%, to $86.80 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $2.26, or 3.4%, to $81.95 per barrel.
According to market sources citing data from the American Petroleum Institute (API), U.S. crude oil inventories fell by approximately 3.3 million barrels during the week ended July 24, reinforcing expectations of stronger demand and tightening supply.
Meanwhile, gasoline inventories rose by 918,000 barrels, while distillate stocks, including diesel and heating oil, increased by 355,000 barrels. Investors are now awaiting official inventory figures from the U.S. Energy Information Administration (EIA), due later on Wednesday.
Adding further support to prices, sources told Reuters that OPEC+ is likely to pause planned oil production increases for three months beginning in October after completing the scheduled return of output previously curtailed under voluntary production cuts.
Oil markets have remained highly volatile amid the ongoing conflict involving the United States, Israel, and Iran, which has disrupted global crude flows, particularly through the strategically vital Strait of Hormuz.
On Tuesday, oil prices had tumbled nearly 5% to a two-week low after optimism emerged that diplomatic efforts to end the U.S.-Iran conflict could resume following a temporary pause in hostilities.
U.S. President Donald Trump, who halted a two-week bombing campaign over the weekend, told Fox News that discussions with Iran were progressing positively but warned that military action could resume if negotiations fail. Iran, however, denied reports that it was seeking to restart talks with Washington.
Separately, a Gulf source and a Western diplomat told Reuters that Oman has proposed a framework to manage shipping through the Strait of Hormuz, including the collection of voluntary transit fees. The proposal, backed by Gulf states, is intended to restore stability and ensure the uninterrupted flow of global trade through one of the world’s most critical energy corridors.
By Reuters
