NEW YORK: Oil prices settled up on Wednesday, bouncing back from one-month lows in the previous session, as investors assessed prospects of oversupply and talks over a Russia-Ukraine peace deal ahead of the US Thanksgiving holiday.
Brent crude futures settled 65 cents, or 1.04%, higher to US$63.13 a barrel, while US West Texas Intermediate crude futures gained 70 cents, or 1.21%, at US$58.65.
US crude inventories climbed by 2.8 million barrels to 426.9 million barrels last week as imports surged, the Energy Information Administration said on Wednesday. Analysts had expected a 55,000-barrel rise.
"We are definitely on the road to a rather healthy supply glut, there is no doubt about it, and the crude build is indicative of that," said John Kilduff, partner with Again Capital.
US energy firms cut the number of oil rigs by 12 to 407 this week, their lowest since September 2021, energy services firm Baker Hughes said on Wednesday.
Opec+ is likely to leave output levels unchanged at its meeting on Sunday, three Opec+ sources told Reuters on Tuesday.
Offering some support to crude prices were rising expectations for a potential US Federal Reserve interest rate cut in December. Lower rates would stimulate economic growth and bolster demand for oil.
Investors awaited more clarity on Russia and Ukraine negotiations on Wednesday. Ukrainian President Volodymyr Zelenskiy told European leaders on Tuesday that he was ready to advance a US-backed framework for ending the war with Russia, driving both Brent crude and WTI down to one-month lows.
"The bottom line is, there's still no peace agreement and it's going to be difficult to satisfy all the parties to come to the table and sign one," Andrew Lipow, president of Lipow Oil Associates.
US President Donald Trump said he directed his representatives to meet separately with Russian President Vladimir Putin and Ukrainian officials. A Ukrainian official said Zelenskiy could visit the United States in the next few days to finalize a deal.
"If finalised, the deal could rapidly dismantle Western sanctions on Russian energy exports," potentially driving WTI prices to about $55, IG market analyst Tony Sycamore said in a client note. "For now, the market waits for more clarity, but the risk appears to be for lower prices unless talks falter."
The Caspian Pipeline Consortium (CPC), which handles about 1.5% of global oil, said it resumed oil loadings overnight, having suspended loadings after a Ukrainian drone attack earlier in the week. — Reuters
