Oil up as investors await clarity on supply, Russia-Ukraine deal
[NEW YORK] Oil prices edged up on Wednesday ahead of the US Thanksgiving holiday, as US investors assessed prospects of oversupply and talks over a Russia-Ukraine peace deal.
Brent crude futures gained 42 cents, or 0.67 per cent, to $62.9 a barrel by 2.10 pm ET (1910 GMT). US West Texas Intermediate crude futures were up 50 cents, or 0.86 per cent, at US$58.45.
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.
Net US crude imports increased by 1.05 million barrels per day (bpd), the EIA said, to 2.84 million bpd, their highest since early September.
US energy firms this week cut the number of oil and natural gas rigs operating for the first time in four weeks, 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.
Investors awaited more clarity on Russia and Ukraine negotiations. Ukrainian President Volodymyr Zelensky 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 Zelensky could visit the United States in the next few days to finalise a deal.
“If finalised, the deal could rapidly dismantle Western sanctions on Russian energy exports,” potentially driving WTI prices to about US$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.”
Britain, Europe and the United States have tightened sanctions on Russia recently, and Indian purchases of Russian oil are set to hit their lowest for three years in December.
The Caspian Pipeline Consortium (CPC), which handles about 1.5 per cent of global oil, said it resumed oil loadings overnight, having suspended loadings after a Ukrainian drone attack earlier in the week. REUTERS
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