Oil prices recovered slightly on Wednesday, after dipping to one-month lows in the previous session amid signs that Ukraine is nearing a peace deal with Russia that would likely lead to the end of international sanctions on Russian supply.
Brent crude futures rose 19 cents, or 0.3%, to $62.67 a barrel as of 0114 GMT, while U.S. West Texas Intermediate crude futures gained 14 cents, or 0.24%, to $58.09 a barrel.
Both contracts settled down 89 cents on Tuesday after Ukrainian President Volodymyr Zelenskiy told European leaders in a speech that he was ready to advance a U.S.-backed framework for ending the war with Russia and that only a few points of disagreement remained.
“If finalised, the deal could rapidly dismantle Western sanctions on Russian energy exports,” potentially driving WTI prices to around $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.”
U.S. President Donald Trump said he has directed his representatives to meet separately with Russian President Vladimir Putin and Ukrainian officials, while a Ukrainian official said Zelenskiy could visit the U.S. in the next few days to finalise a deal with Trump.
Britain, Europe and the United States have tightened sanctions on Russia recently in a stepped-up pressure campaign, and Russian oil purchases by key buyer India are set to hit their lowest level in three years in December.
Offering some support to crude prices, expectations have risen for a potential U.S. Federal Reserve interest rate cut in December following economic data releases showing lower retail spending and softer inflation. Lower rates would stimulate economic growth and bolster demand for oil.
(Reporting by Colleen Howe; Editing by Kevin Buckland)