Oil prices rose on Wednesday, with Brent crude climbing back above $70 per barrel and West Texas Intermediate trading around $67. Two main developments helped lift the market.
First, the U.S. Energy Information Administration sharply reduced its forecast for a global oil oversupply. The agency lowered its estimate for 2025 and cut the 2026 surplus projection roughly in half, citing expectations that output from Iran and Venezuela will be lower than previously assumed. That adjustment narrowed the anticipated excess supply and provided upward support for prices.
Second, February’s U.S. inflation report showed consumer prices rising at the slowest pace in four months. The softer inflation reading improved investor appetite for riskier assets, including commodities such as crude oil, after a stretch of disappointing inflation data that had weighed on sentiment.
Those factors helped oil pare losses from earlier in the week, even as concerns remain over policy and demand dynamics. Prices have retreated since mid-January, pressured by uncertainty around tariff announcements from President Trump, OPEC+ plans to raise production, and signs of weaker fuel demand from China.
Industry data showed U.S. commercial crude inventories rose by 4.2 million barrels last week, a build that normally eases near-term price gains. However, the key Cushing, Oklahoma storage hub—an important delivery point for U.S. crude—recorded its first drawdown in five weeks, an indication of some regional tightening.
Geopolitical developments added mixed signals to the market backdrop. Ukraine accepted a U.S.-proposed 30-day ceasefire with Russia, a move that could reduce near-term energy-related geopolitical risk in Europe. At the same time, Yemen’s Houthi rebels announced plans to resume attacks on Israeli-linked shipping for the first time in roughly two months, a reminder of ongoing volatility in key maritime routes.
In sum, a narrower global supply outlook from the EIA and cooler U.S. inflation data provided fresh support for oil prices, helping them recover despite lingering downside risks from policy uncertainty, planned production increases, and softer demand trends in major consuming nations.