Crude prices moved higher on Wednesday, erasing early declines, as traders grew increasingly skeptical that ongoing Russia-Ukraine peace discussions would lead to any easing of sanctions on Russian oil. Gains remained modest, however, with persistent worries about oversupply continuing to restrain the market.
By 08:16 GMT, Brent crude was up 26 cents, or 0.4%, at $62.71 a barrel. U.S. West Texas Intermediate rose 29 cents, or 0.53%, to $58.95. Both benchmarks had dropped more than 1% in Tuesday’s session.
In a research note, analysts at Goldman Sachs wrote that “Oil markets and prediction markets do not appear to price a large probability of a near-term peace agreement and removal of the sanctions on Russia oil.”
According to the Russian government, a five-hour discussion between President Vladimir Putin and senior envoys representing U.S. President Donald Trump ended without breakthrough, leaving both sides without a compromise on a possible Ukraine peace deal. Traders are watching closely for any progress that could eventually lift sanctions on Russian energy firms such as Rosneft and Lukoil, freeing up supplies that are currently restricted.
Concerns deepened after Putin charged on Tuesday that European governments were obstructing U.S. efforts to negotiate an end to the conflict, saying their proposals were “absolutely unacceptable” to Moscow. The remarks reinforced expectations that Russian barrels will continue flowing mainly to China and India, at least for now.
Tony Sycamore, market analyst at IG, noted that despite pessimism over the talks, “concerns over an oversupply glut and soft demand continue to weigh on the crude oil price, which must remain above support in the mid $50’s to avoid a deeper setback.”
The war, now in its third year following Russia’s 2022 invasion of Ukraine, has widened beyond the front lines, with Kyiv increasingly targeting Russian energy sites using drones. Recent strikes on export terminals along the Black Sea have underscored the geopolitical risks surrounding supply.
Adding to the bearish pressures, U.S. inventory data pointed to another build in crude and fuel stocks. Market sources citing American Petroleum Institute figures said U.S. crude inventories rose by 2.48 million barrels in the week ending November 28. Gasoline stocks grew by 3.14 million barrels, while distillate inventories increased by 2.88 million.
The U.S. Energy Information Administration is set to publish the official government numbers later on Wednesday.
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