Published by Global Banking & Finance Review®
Posted on October 29, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GoogleOil prices rise as US stockpiles drop significantly, with trade optimism boosting economic outlook. Brent and WTI futures see gains.
By Shariq Khan
NEW YORK (Reuters) -Oil prices rose on Wednesday after data showed U.S. crude and fuel inventories drew down more than expected last week, and as U.S. President Donald Trump's optimistic tone over upcoming talks with his Chinese counterpart helped ease economic jitters.
Brent crude futures rose 52 cents, or 0.8%, to settle at $64.92 a barrel, while U.S. West Texas Intermediate crude futures gained 33 cents, or 0.6%, to close at $60.48.
U.S. crude oil, gasoline and distillate fuel stockpiles each fell more last week than analysts had expected, data from the U.S. Energy Information Administration showed on Wednesday.
Crude oil stocks fell by nearly 7 million barrels, the data showed, far exceeding the 211,000-barrel drop that was forecast. [EIA/S]
The big decline forced a reassessment of expectations that the oil market is headed for a large surplus, with the OPEC+ group raising output and U.S. production at record levels.
"Where's the glut?" Price Futures Group analyst Phil Flynn said after the report. "The longer the glut doesn't hit, the more we will question whether it exists," he said.
The EIA data also showed strong implied oil demand, UBS analyst Giovanni Staunovo said. Combined with the decline in inventories, the EIA report was very positive for crude oil prices, he said.
Trump predicted a good outcome from his talks with Chinese President Xi Jinping, which are scheduled to take place on Thursday at a summit in South Korea.
Also at that summit, the U.S. and South Korea finalized details of a fraught trade deal.
The optimistic note about U.S.-China talks and the deal with South Korea could help alleviate some concerns of a slump in economic activity from Trump's tariffs and trade wars, which have raised concerns around oil demand and weighed on commodity prices in recent months.
Still, other concerns continue to plague the global economic outlook. A divided U.S. Federal Reserve on Wednesday cut interest rates by 25 basis points as expected, but Chair Jerome Powell's comments after the central bank meeting struck a note of caution on what lies ahead.
Brent and WTI last week registered their biggest weekly gains since June after Trump imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting major oil companies Lukoil and Rosneft.
However, doubts that sanctions would offset oversupply and talk of another OPEC+ output increase pressured prices; both benchmarks fell 1.9%, or more than $1, in the previous session.
OPEC+, the world's largest group of oil-producing nations, is leaning towards a modest output boost in December, four sources familiar with the talks said, with two sources citing an additional 137,000 bpd.
(Reporting by Shariq Khan and Ahmad Ghaddar, additional reporting by Sam Li;Editing by Alexander Smith, Nia Williams and David Gregorio)
Crude oil is a natural, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. It is extracted from the ground and refined into various products like gasoline, diesel, and other petrochemicals.
OPEC+ is a coalition of oil-producing countries that includes the Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing nations, such as Russia, that collaborate to manage oil production and influence prices.
The EIA, or U.S. Energy Information Administration, is a federal agency that collects, analyzes, and disseminates independent energy information to promote sound policymaking and informed decisions in energy markets.
An interest rate is the amount charged by a lender to a borrower for the use of assets, typically expressed as a percentage of the principal amount, and can influence economic activity and inflation.
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