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Investing.com -- Oil prices edged lower Wednesday, as data pointed to rising U.S. inventories and as markets awaited the impact of impending U.S. sanctions on Russian oil companies.
At 05:45 ET (10:45 GMT), Brent Oil Futures expiring in January fell 0.9% to $64.30 per barrel and West Texas Intermediate (WTI) crude futures dropped 0.9% to $60.13 per barrel.
Both contracts jumped more than 1% on Tuesday.
US crude stocks rise sharply - API
Data from the American Petroleum Institute (API) showed U.S. crude stocks rose by 4.4 million barrels in the week ended Nov. 18, more than three times the prior week’s build of 1.3 million barrels. Gasoline inventories climbed by 1.55 million barrels and distillate inventories increased by 577,000 barrels.
The inventory rise came as broader supply forecasts point to a potential overhang in early 2026. Producers have kept output elevated, while global agencies have warned that demand growth may not be strong enough to absorb available supply.
"Overall, the report was relatively bearish. However, the market will be more focused on the release of the widely followed US Energy Information Administration (EIA) inventory numbers later today," ING analysts said in a note.
U.S. sanctions against Russia loom
At the same time, markets are focused on U.S. sanctions targeting Russian oil companies Rosneft and Lukoil, which are set to take effect on Nov. 21.
The measures will restrict access to U.S.-dollar financing and limit transactions with the firms.
"Market participants appear more concerned about supply risks than the odds of a surplus going forward," ING analysts said.
"Worries over Russian diesel supply amid sanctions and Ukrainian attacks on Russian refineries are driving the market’s strength," they added, referring to Tuesday’s gains.
Meanwhile, an Axios report, citing U.S. and Russian officials, stated that the Trump administration has been quietly coordinating with Moscow to develop a new proposal aimed at ending the war in Ukraine.
A potential deal could reshape global supply expectations and sanctions policy, potentially lowering the geopolitical risk premium and pushing oil prices down.
Ayushman Ojha contributed to this article