Oil prices closed 0.5 per cent higher on Wednesday on optimism around tighter supply after a temporary shutdown at two large fields in Kazakhstan and as low volume of Venezuelan oil exports highlighted slow progress in reversing output cuts in the South American country.
Brent futures settled up 32 cents, or 0.5 per cent, to $65.24 a barrel, while the US West Texas Intermediate crude contract rose 26 cents, or 0.4 per cent, to $60.62 a barrel. Both contracts closed about 1.5 per cent higher in the previous session after OPEC+ producer Kazakhstan halted output at its Tengiz and Korolev oilfields on Sunday due to power distribution issues.
Elsewhere in the country, oil from the vast Kashagan field has been diverted to the domestic market for the first time due to bottlenecks at the Black Sea CPC terminal, four industry sources told Reuters on Wednesday after equipment at the terminal was seriously damaged in drone attacks. Reuters reported on Wednesday that the operator of the Tengiz oilfield, TCO, has declared force majeure on crude oil deliveries into the CPC pipeline system, citing a TCO letter.
Oil production at the two Kazakh fields could be halted for another seven to 10 days, Reuters reported on Tuesday, citing three industry sources. The volume of Venezuelan oil exported under a flagship $2 billion supply deal with the US reached about 7.8 million barrels on Wednesday, vessel-tracking data and documents from PDVSA showed, highlighting the slow progress that has prevented the state-run oil company from fully reversing recent output cuts.
US crude oil and gasoline stockpiles were expected to have risen by about 1.7 million barrels last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Tuesday. The International Energy Agency also revised its 2026 global oil demand growth forecasts higher on Wednesday in its latest monthly oil market report, suggesting a slightly narrower surplus for the market this year.
The increased geopolitical tensions, which add pressure to the oil markets as tariffs could slow economic growth, prompted risk-off sentiment, said Giovanni Staunovo, an analyst at UBS.
The American Petroleum Institute’s weekly inventory data is due at 4:30 pm EST (2130 GMT) on Wednesday, and government figures are due at 12 pm EST (1700 GMT) on Thursday, both a day later due to a US federal holiday on Monday.
