Oil prices climbed on Wednesday, June 26, following a much larger-than-expected decline in U.S. crude and fuel inventories. The development reflects signs of firm consumer demand in the world’s largest oil market and has helped sustain a broader recovery in energy prices.
According to data released by the U.S. Energy Information Administration (EIA), crude oil inventories fell by 5.8 million barrels in the week ending June 21. This drawdown significantly exceeded analysts' forecasts, which had predicted a modest decline of only 0.8 million barrels. At the same time, gasoline stockpiles dropped by 2.1 million barrels, while distillate inventories, which include diesel and heating oil, fell by 4.1 million barrels. The fuel demand reached its highest levels since December 2021.
U.S. refineries operated at 94.7 percent capacity during the week, the highest utilization rate in nearly a year, increasing total processing by 125,000 barrels per day. The strong refinery activity is being driven by peak seasonal demand, especially as Americans take to the roads for the summer driving season.
Oil benchmarks responded positively to the data. Brent crude edged up 0.2 percent to settle at \$67.83 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 0.3 percent to reach \$65.12 per barrel. The previous session also saw prices rise by nearly 1 percent, indicating continued bullish sentiment in the market.
Analysts suggest that this trend could continue, supported by both strong consumption and geopolitical stability. Tensions in the Middle East, especially between Israel and Iran, have recently eased, removing a major risk factor that previously fueled volatility. In parallel, remarks from Rosneft executive Igor Sechin suggest that the OPEC+ alliance could consider accelerating the timeline for increasing production levels.
Market watchers are also keeping a close eye on U.S. monetary policy. Expectations for a Federal Reserve interest rate cut in September are rising, which could provide a further boost to the economy and support demand for energy products.
Energy analysts at Nomura and ANZ agree that with geopolitical tensions fading, fundamentals such as inventory levels and consumption patterns are once again driving oil market movements. The next few weeks will be crucial in determining whether the recent price momentum can be sustained, especially as OPEC+ decisions and macroeconomic signals continue to unfold.
Investors are now waiting for next week’s EIA report and upcoming OPEC+ meetings, both of which could significantly influence short-term market direction.