Oil prices moved higher on Wednesday, recovering from earlier declines, as traders increasingly expect that Russia-Ukraine peace discussions will fail to produce any breakthrough that could lift sanctions on Russian crude. Gains, however, were tempered by persistent worries about excess global supply.
By 08:16 GMT, Brent crude was up 26 cents, or 0.4%, at $62.71 a barrel, while U.S. West Texas Intermediate rose 29 cents, or 0.53%, to $58.95. Both benchmarks had slid more than 1% in Tuesday’s session.
Goldman Sachs analysts noted in a report 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.”
The Russian government said that a five-hour meeting between President Vladimir Putin and senior envoys of U.S. President Donald Trump ended without a compromise on a potential peace plan for Ukraine. Market participants are watching these negotiations closely to assess whether sanctions on Russian companies — including major oil firms Rosneft and Lukoil — could eventually be rolled back, potentially releasing sidelined supplies.
Concerns deepened after Putin accused European governments on Tuesday of obstructing U.S. efforts to end the conflict, arguing they had proposed terms that would be “absolutely unacceptable” to Moscow. The comments fueled expectations that Russian crude will likely remain restricted, continuing to flow mainly toward buyers such as China and India.
IG market analyst Tony Sycamore wrote that despite skepticism around 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, which began with Russia’s 2022 invasion of Ukraine, has expanded in scope, with Kyiv increasingly targeting Russian oil facilities via drone strikes. Recent attacks on export infrastructure along the Russian Black Sea coast have underscored the geopolitical risks hovering over the energy market.
Meanwhile, rising U.S. oil inventories added another layer of pressure. According to market sources citing American Petroleum Institute data released Tuesday, U.S. crude stockpiles rose by 2.48 million barrels in the week ending November 28. Gasoline inventories climbed by 3.14 million barrels, and distillate stockpiles increased by 2.88 million barrels.
Official inventory figures from the U.S. Energy Information Administration are expected later on Wednesday.