Oil prices traded in a narrow range on Wednesday as investors assessed macroeconomic signals from the United States and monitored diplomatic efforts aimed at ending the Russia–Ukraine conflict.
Brent crude oil, against which Nigerian crude oil is priced, inched up by 19 cents or 0.3% to $62.13 per barrel, while West Texas Intermediate (WTI) matched the same 19-cent increase to trade at $58.44 per barrel.
Market participants said the cautious movement reflects a lack of clear direction as traders weigh geopolitical developments against expectations of monetary policy easing by the U.S. Federal Reserve.
Energy analysts noted that a draw in U.S. crude inventories offered mild support. Industry data from the American Petroleum Institute showed an estimated 4.78 million-barrel decline in U.S. crude stockpiles last week.
However, the impact of this reduction was softened by significant increases in gasoline inventories (+7 million barrels) and distillate inventories (+1.03 million barrels), indicating uneven consumption trends.
Attention also shifted to the Federal Reserve’s policy meeting, with investors widely expecting a 25-basis-point cut in benchmark interest rates.
Analysts believe a rate reduction could support oil demand by easing financial conditions and stimulating economic activity, particularly amid signs of a cooling U.S. labour market.
Despite these potential tailwinds, traders remain cautious as concerns grow about supply exceeding demand. Analysts at ING observed that the market continues to drift toward a surplus, adding that Russian seaborne exports, while still elevated, are struggling to secure buyers. They warned that Russian production could decline if the current backlog persists.
Geopolitical sentiment remained a critical driver as Ukraine signalled progress in its diplomatic engagements.
President Volodymyr Zelenskiy stated that Ukraine and European allies are preparing updated peace documents for submission to the United States, raising hopes of renewed negotiations.
A breakthrough in peace efforts could pave the way for easing sanctions on Russian entities, potentially releasing restricted barrels into the global supply chain.
Meanwhile, the U.S. Energy Information Administration (EIA) adjusted its production outlook, projecting that U.S. crude output will reach a higher-than-expected record average of 13.61 million barrels per day in 2025.
However, the agency lowered its 2026 forecast slightly to 13.53 million barrels per day, citing revised operational assumptions.
Overall, the oil market remains in consolidation mode, with traders positioned on data releases and geopolitical cues that could shape sentiment in the near term.