Oil prices rose for the second straight day on Wednesday, supported by supply concerns, hopes of a U.S.-China trade agreement, and reports that the United States plans to purchase crude oil to replenish its strategic reserves.
Brent crude futures increased by 18 cents, or 0.29%, to reach $61.50 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 21 cents, or 0.37%, to $57.45 per barrel.
The rise in oil prices followed a rebound earlier this week from a five-month low, which was driven by higher production levels and reduced demand amid global trade tensions. Supply worries intensified after reports that a planned summit between U.S. President Donald Trump and Russian President Vladimir Putin had been postponed, raising fears of potential disruptions to Russian oil supply amid increasing Western pressure.
Mukesh Sahdev, founder and CEO of energy consultancy XAnalysts, said that despite an overall bearish trend in oil prices, supply disruptions in hotspots such as Russia, Venezuela, Colombia, and the Middle East continue to prevent prices from falling below the $60 per barrel mark.
Investors are also closely watching U.S.-China trade talks, as officials from both countries are set to meet in Malaysia this week. President Donald Trump expressed optimism about reaching a “fair trade agreement” with Chinese President Xi Jinping, whom he is expected to meet in South Korea next week.
Additional support for oil prices came from the U.S. government’s plan to replenish its Strategic Petroleum Reserve (SPR). The U.S. Department of Energy announced its intention to purchase 1 million barrels of crude oil to take advantage of relatively lower prices and rebuild stockpiles.
According to market sources, U.S. crude oil, gasoline, and distillate inventories declined last week, further boosting market sentiment and supporting the recent uptick in oil prices.
