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Oil prices rebounded sharply on Wednesday, as technical indicators signalled that recent losses were excessive and a bullish US inventory report eased concerns over oversupply.

Brent settled $1.27, or 2.07%, higher at $62.59 a barrel.

WTI rose $1.26, or 2.20%, to $58.50 a barrel.

The gains followed data from the US Energy Information Administration (EIA) showing declines in crude, gasoline, and distillate inventories last week, as refinery activity and fuel demand strengthened. The drawdown helped calm market jitters over a potential supply glut following weeks of price weakness.

Geopolitical tensions further underpinned prices. Reports that a planned summit between President Donald Trump and Russian President Vladimir Putin had been postponed reignited supply concerns, particularly as Western governments intensified pressure on Asian buyers to scale back purchases of Russian oil.

Adding to the bullish tone, European Union leaders are expected to approve a 19th sanctions package against Russia on Thursday, after Slovakia dropped its objections. The announcement came as Russia launched a fresh wave of drone and missile attacks on Ukraine, underscoring the fragile state of ongoing peace efforts by Western governments. 

Still, analysts cautioned that the extent to which new sanctions might curb Russian crude flows remains unclear, tempering expectations of a sustained rally.

Written: Farid Muzaffar