Oil prices edged up on Thursday after falling in the previous session as concerns a U.S. push to end the Russia-Ukraine war may add supply into an amply supplied market were offset by a bigger-than-expected draw in U.S. crude stockpiles.
Brent crude futures climbed 16 cents, or 0.25%, to $63.67 a barrel at 0338 GMT, while U.S. West Texas Intermediate crude futures rose 17 cents, or 0.29%, to $59.61.
Both benchmarks slightly rebounded after falling 2.1% during Wednesday’s session. The movement followed a Reuters report that the U.S. had signalled to Ukraine to accept a U.S.-drafted framework to end the war with Russia by giving up territory and some weapons, citing two sources familiar with the matter.
Prices dropped on concerns an end to the war would end sanctions on Russian crude sales, releasing that supply onto the market at the same time oil is being stored on tankers and major producers have increased their output quotas.
In a note on Thursday, analysts at ING cautioned that Ukraine is unlikely to back the plan as they could see it favouring Russia but “signs that the U.S. is still trying to work on a deal eases some concerns over further sanctions against Russia and also how strongly current curbs will be enforced.”
Lending some support to prices was the bigger-than-expected draw in U.S. crude stockpiles reported on Wednesday, which reflected rising refining runs amid good margins in the world’s biggest oil consumer, and export demand for U.S. crude.
Crude inventories fell by 3.4 million barrels to 424.2 million barrels in the week ended November 14, the EIA said, compared with analysts’ expectations in a Reuters poll for a 603,000-barrel draw.
That said, analysts also pointed out that gasoline and distillate stockpiles in the U.S. built for the first time in over a month, a sign of slowing consumption.
The market is also awaiting the impact of a November 21 deadline set by the U.S. for companies to wind down their business with Rosneft and Lukoil, Russia’s two biggest oil producers and exporters.
The companies were sanctioned as part of U.S. efforts to end the Russia-Ukraine war.
(Reporting by Katya Golubkova in Tokyo and Siyi Liu in Singapore; Editing by Jacqueline Wong and Christian Schmollinger)