Oil prices climbed by more than $2 a barrel in early trading on Wednesday, supported by a decline in U.S. crude inventories, recovering part of the losses recorded in the previous session after fighting between Washington and Tehran came to a halt.
Brent crude futures rose $2.71, or 3.2%, to $86.80 a barrel by 0002 GMT, while U.S. West Texas Intermediate (WTI) crude gained $2.26, or 3.4%, to $81.95 a barrel.
Market sources, citing data from the American Petroleum Institute (API), said on Tuesday that U.S. crude oil inventories fell by about 3.3 million barrels in the week ended July 24.
At the same time, gasoline inventories increased by 918,000 barrels, while distillate stockpiles rose by 355,000 barrels compared with the previous week, the sources said.
Official inventory data from the U.S. Energy Information Administration (EIA) is due later on Wednesday.
Additional support for prices came from OPEC and its allies in the OPEC+ alliance. Sources told Reuters the group is expected to pause planned oil production increases for three months starting in October after completing the scheduled restoration of output following voluntary production cuts.
Oil prices have remained highly volatile due to the U.S.-Israeli war against Iran, which disrupted global crude oil flows, particularly following the effective closure of the Strait of Hormuz.
Prices fell about 5% on Tuesday to their lowest level in two weeks amid hopes that serious efforts to end the conflict between the United States and Iran would resume following a temporary halt in hostilities.
U.S. President Donald Trump, who suspended a two-week U.S. bombing campaign earlier this week, told Fox News on Tuesday that there were “good talks” with Iran, while warning that military strikes could resume if negotiations collapsed. Iran, however, denied seeking to restart negotiations with Washington.
Meanwhile, a Gulf source and a Western diplomat told Reuters that Oman had presented Iran with a proposal for managing the Strait of Hormuz, including voluntary transit fees for ships using the strategic waterway.
The proposals, backed by Gulf states, are intended to serve as a framework for restoring maritime trade through the strait following disruptions caused by the war.
Source: Reuters
