The US move to end Russia’s war in Ukraine eased supply concerns. Oil prices rose slightly on Thursday after declining in the previous session. A larger-than-expected decline in U.S. crude oil inventories also eased the concerns.
Brent crude oil futures rose 16 cents, or 0.25%, to $63.67 a barrel at 03:38 GMT, while WTI crude oil futures rose 17 cents, or 0.29%, to $59.61.
Both indices recovered slightly after falling 2.1% in Wednesday’s session. This move followed reports that the US had signaled to Ukraine to accept a US-drafted framework for ending the war with Russia by giving up territory and some weapons.
Prices fell amid concerns that the end of the war would end sanctions on Russian crude oil sales, allowing oil stored in sea tankers to enter the market, and that major producers would increase their production quotas.
Some analysts say Ukraine is unlikely to support the plan because it favors Russia. However, signs that the US is still working on a deal are easing some concerns about additional sanctions against Russia and how strongly existing restrictions will be enforced.
US crude oil inventories fell more than expected, according to EIA data, but gasoline and distillate stocks rose.
A larger-than-expected decline in US crude oil inventories reported on Wednesday provided some support to prices. This decline reflects increased refining capacity, combined with good margins and export demand for US crude in the world’s largest oil consumer.
The EIA reported that crude oil inventories decreased by 3.4 million barrels in the week ending November 14, falling to 424.2 million barrels. This figure contrasted with analysts’ poll expectations for a 603,000 barrel decline.
However, analysts also noted that US gasoline and distillate stockpiles increased for the first time in over a month, a sign of slowing consumption.
Russian Deputy Prime Minister Alexander Novak assessed the new US sanctions against the Russian oil sector. Speaking to reporters in Moscow, Novak stated that they were accustomed to the effects of the sanctions and that the price reductions for Russian oil would end soon.
The market is trying to analyze the impact of the November 21 deadline set by the US for Russia to terminate its ties with Rosneft and Lukoil, Russia’s two largest oil producers and exporters, under sanctions as part of its efforts to end the Russia-Ukraine war.