08:44 AM EDT, 08/21/2025 (MT Newswires) -- Oil prices rose for a second day early Thursday following a day-prior report showing a larger than expected drop in U.S. inventories as summer demand continues to run hot, while fading hopes for a ceasefire in Russia's war on Ukraine that would see sanctions on Russian exports eased also offered support.

West Texas Intermediate crude oil for September delivery was last seen up US$0.51 to US$63.22 per barrel, while October Brent crude was up $0.48 to US$67.32.

The rise comes after the Energy Information on Wednesday reported U.S. oil inventories fell by six-million barrels last week, well more than the consensus estimate for a 1.8-million barrel drop among analysts polled by Reuters. The drop came on higher exports and solid demand for refined products amid the summer driving season.

"The latest weekly EIA report showed a bigger-than-expected 6 million barrel draw in U.S. crude inventories, the largest since June. The reduction was driven by a combination of robust refinery runs, now operating at the highest seasonal level since 2019 - and a pick-up in exports, which rose to an April high of 4.38 million barrels day. This combination highlights underlying demand strength in refined products, especially jet fuel which also reached a four-year seasonal high at 1.9 million barrels a day," Ole Hansen, head of commodity strategy at Saxo Bank, wrote.

Rising doubts over the outlook for a ceasefire agreement between Ukraine and Russia that would see sanctions on Russian oil exports eased, putting more barrels onto an oversupplied market also offering support to prices. The Friday meeting between U.S. President Donald Trump and Vladimir Putin, his Russian counterpart, that appeared to show support for a ceasefire in Russia's war on Ukraine. However the outlook for peace is dimming as Russia continues attacks and shows little interest in peace talks, while the Trump Administration is stepping up pressure on India to limit imports of Russian oil.

"This week, the tense rhetoric from administration officials towards India over their imports of Russian oil has intensified. Treasury Secretary Bessent on Tuesday accused India of profiteering from Russian oil by buying it at a discount and selling products to the market, calling it 'the Indian arbitrage'," Helima Croft, Head of Global Commodity Strategy and MENA Research, noted.