Summary
Oil prices edged higher on Wednesday after slipping to a one-month low in the previous session. Brent crude climbed 27 cents to $62.75 per barrel as of 0512 AM WAT, while US West Texas Intermediate increased by 24 cents to $58.19.
Both benchmarks had fallen 89 cents on Tuesday following remarks from Ukrainian President Volodymyr Zelenskiy, who told European leaders he was prepared to move forward with a US-supported framework for ending the war with Russia, with only a few unresolved issues.
Analysts say a finalized deal could reshape global energy dynamics. IG market analyst Tony Sycamore noted that “If finalised, the deal could rapidly dismantle Western sanctions on Russian energy exports,” potentially pushing WTI closer to $55.
For now, oil traders are watching developments closely. Sycamore added that “the risk appears to be for lower prices unless talks falter.” Meanwhile, US President Donald Trump has instructed his representatives to hold separate discussions with Russian President Vladimir Putin and Ukrainian officials. Reports suggest Zelenskiy may visit the US soon to finalize the agreement.
Sanctions pressure remains intense. Britain, Europe, and the US have recently tightened restrictions on Russia, while India—one of Russia’s biggest buyers—is set to reduce Russian oil imports to their lowest level in three years this December.
In the US, crude inventories declined last week even as fuel stockpiles increased. A Reuters survey had earlier estimated a rise of 1.86 million barrels in US crude stocks for the week ending November 21. Official figures from the Energy Information Administration are expected at 10:30 a.m. ET.
The oil market has also drawn some support from expectations of a possible Federal Reserve interest rate cut in December. Recent economic reports show softer inflation and weaker retail spending. A rate cut would likely stimulate economic activity and increase oil demand.
What you should know
Oil prices are rebounding slightly after hitting a monthly low, driven by optimism surrounding potential peace negotiations between Russia and Ukraine and expectations of a possible US interest rate cut.
However, analysts warn that prices may drift lower if sanctions ease or if peace talks progress rapidly.
