Oil prices rose modestly on Wednesday, rebounding from recent four-year lows as investors assessed progress in United States-China trade discussions and indications of slowing U.S. crude production.
By 2:45 pm AEST (4:45 am GMT), Brent crude futures were up $0.53, or 0.9%, at US$62.68 per barrel. U.S. West Texas Intermediate (WTI) crude rose $0.58, or 1%, to US$59.67 per barrel.
Both benchmarks had recently plunged to their lowest levels since 2021, following the Organisation of the Petroleum Exporting Countries (OPEC+) alliance’s move to accelerate output increases. The decision heightened market fears of oversupply at a time when U.S. tariffs have intensified concerns over weakening global demand.
However, recent declines in oil prices have prompted several U.S. energy firms, including Diamondback Energy and Coterra Energy, to scale back drilling activity. Analysts suggest that these reductions could support prices in the medium term by curbing output growth.
The U.S. Energy Information Administration (EIA) also trimmed its production forecasts. It now expects U.S. crude output to average 13.42 million barrels per day (bpd) in 2025, down from an earlier estimate of 13.51 million bpd.
For 2026, output is projected to rise slightly to 13.49 million bpd, also revised lower from the prior forecast of 13.56 million bpd.
Adding to the bullish sentiment, the American Petroleum Institute reported a draw of 4.49 million barrels in U.S. crude stockpiles for the week ending May 2, versus expectations of a 2.5 million barrel draw.
Traders are also awaiting the U.S. Federal Reserve’s interest rate decision, due later Wednesday. The central bank is widely expected to keep rates steady amid economic uncertainty fuelled by recent tariff announcements.
