Oil prices remained stable on Wednesday after falling by about 1% in the previous session, as investors monitored progress in peace talks between Russia and Ukraine and awaited a decision on US interest rates, UNN reports with reference to Reuters.
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Brent crude futures rose 7 cents, or 0.1%, to $62.01 a barrel at 05:00 GMT (07:00 Kyiv time). US West Texas Intermediate crude was at $58.32 a barrel, up 7 cents, or 0.1%.
"Oil markets are struggling for direction at this time, as far as we can tell, with little positive effect from the US inventory draw reported by the API," said Suvro Sarkar, lead energy analyst at DBS Bank, referring to the American Petroleum Institute.
"Traders will be looking for signals from any breakthroughs or lack thereof in Ukraine peace talks, while the US Fed's interest rate cut policy is another key macroeconomic factor that could provide some support to oil prices," he said.
Market sources, citing API data, said on Tuesday that US crude inventories fell by 4.78 million barrels last week, while gasoline inventories rose by 7 million barrels and distillate inventories by 1.03 million barrels.
Meanwhile, markets expected the US Federal Reserve to cut its key interest rate by a quarter point at its meeting on Wednesday to support a cooling labor market. Lower interest rates could boost oil demand by stimulating economic growth.
However, oversupply concerns limited gains. ING analysts noted in their note that while the oil market is sinking deeper into an expected oversupply, Russian supplies remain a risk.
"While Russian seaborne crude export volumes remain high, these barrels are struggling to find buyers," ING said, adding that Russian oil production will start to fall if buyers are not found.
Ukrainian President Volodymyr Zelenskyy said his country and its European partners would soon present the US with "finalized documents" on a peace plan to end the Russian-Ukrainian war after days of intense diplomacy.
A peace agreement between Ukraine and Russia could lead to the lifting of international sanctions on Russian companies, which could free up limited oil supplies.
Meanwhile, the Energy Information Administration (EIA) said it expects US oil production to reach a higher level this year than previously forecast, raising its 2025 forecast by 20,000 barrels per day to 13.61 million barrels per day. However, the organization lowered its forecast for total production in 2026 by 50,000 barrels per day to 13.53 million barrels per day.
Oil market to face "super-oversupply" due to rising supply – traders09.12.25, 16:13 • [views_2808]