Oil rises on Russian output concerns, higher U.S. demand

Brent crude futures added 80 cents, or 1.2%, to settle at $66.25 a barrel

Oil prices edged up about 1% to a one-week high on Wednesday as traders expected a lack of progress on a Ukraine peace deal to keep sanctions in place against Moscow, while a weekly report showed growing U.S. oil consumption.

Brent crude futures added 80 cents, or 1.2%, to settle at $66.25 a barrel.

That was the highest close for Brent since September 30.

A top Russian diplomat said the impetus to reach a peace deal with Ukraine was largely exhausted.

Analysts have said a peace deal would likely allow more Russian oil to flow to global markets. Russia was the second-biggest crude producer in the world after the U.S. in 2024, according to U.S. energy data.

Despite sanctions, Russia has been gradually raising oil production and was close last month to meeting its OPEC+ output quota, Deputy Prime Minister Alexander Novak said on Wednesday, the Interfax news agency reported.

OPEC+ includes the Organization of the Petroleum Exporting Countries, Russia and some other producers.

Also supporting crude futures, investors expected the U.S. central bank to keep cutting interest rates. Investors have been without most U.S. economic data during a government shutdown.

Central bank officials agreed at their recent that risks to the U.S. job market had grown enough to warrant an interest rate cut, but many remained wary of high inflation, minutes of the September 16-17 session showed.

Lower interest rates can boost economic growth and demand for oil.

Oil markets held gains as traders focused more on a U.S. report showing an increase in oil consumption last week than the bigger-than-expected increase in crude inventories.

The U.S. Energy Information Administration (EIA) said energy firms added 3.7 million barrels of crude into inventories during the week ended October 3.