The oil market went up on Wednesday as investors assessed prospects of oversupply and talks over a Russia-Ukraine peace deal ahead of the US Thanksgiving holiday.
Brent crude chalked up 65 cents or 1.04 per cent to finish at $63.13 per barrel and the US West Texas Intermediate (WTI) crude gained 70 cents or 1.21 per cent to close at $58.65 per barrel.
Investors awaited more clarity on Russia and Ukraine negotiations on Wednesday.
US envoy Steve Witkoff is set to travel to Moscow next week, while Ukraine is reported to have agreed to a peace deal with just some minor details to be sorted out.
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.
The prospect of a peace deal unlocking additional Russian crude supply and adding to already ample global inventories is likely to continue to weigh on prices.
While hopes remain for increased demand tied to softer US rates or seasonal factors, the longer-term outlook appears tilted toward oversupply, consistent with recent assessments projecting a surplus in 2026.
US crude inventories climbed by 2.8 million barrels to 426.9 million barrels last week as imports surged, the Energy Information Administration (EIA) said on Wednesday.
The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which suggested that crude oil inventories fell by 1.9 million barrels.
The upcoming meeting by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) adds another layer of uncertainty. Market participants will be watching closely for any signals on production quotas or output strategy that could either support prices or reinforce bearish pressure.
However, Reuters reported that OPEC+ is likely to leave output levels unchanged at its meeting on Sunday.
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 oil demand.
Meanwhile, 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.