Oil rose after an industry report signaled a chunky decline in U.S. crude stockpiles, while the market weighed the prospect of a Russia-Ukraine ceasefire in the Black Sea.
West Texas Intermediate futures climbed close to $70 a barrel, a level not seen since the start of the month. U.S. inventories fell by 4.6 million barrels last week, according to the American Petroleum Institute. That would be the biggest draw since November if confirmed by official data on Wednesday.
The U.S., meanwhile, said Russia and Ukraine had agreed to a truce “to ensure safe navigation” in the Black Sea, even as the Kremlin said its involvement would depend on preconditions including sanctions relief.
Some of the world’s top traders on Tuesday reiterated a pessimistic outlook for the rest of this year, but cautioned that OPEC+ output policy and President Donald Trump’s trade and sanctions plans can change that.
Oil is “supported by a U.S. stockpile drop and risk to supply on stepped up sanctions,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Some are considering the prospect for increased supply from Russia should a peaceful solution be reached. However, I believe that’s more a gas story than oil given the current OPEC+ quota system.”
Oil is still down almost 15 per cent from this year’s peak in mid-January as US tariffs and retaliatory measures from targeted nations inject volatility into global markets. More levies are coming next week, including a duty on buyers of Venezuelan crude and gas.
Traders have been snapping up bullish oil options to hedge against the risk that US sanctions will cause prices to spike. President Trump has also vowed “maximum pressure” against Iran to curb its crude exports.
©2025 Bloomberg L.P.
