(Investing) – Oil prices rose Wednesday, bouncing after the previous session’s losses, as high-level U.S.-Russia talks failed to reach a breakthrough in ending the war in Ukraine.
At 08:05 ET (13:05 GMT), expiring in February rose 1.1% to $63.15 per barrel and gained 1.3% to $59.38 per barrel.
Both contracts slipped more than 1% on Tuesday.
U.S.-Russia talks fail to achieve breakthrough
A five-hour meeting at the Kremlin between Russian President Vladimir Putin and U.S. envoys Steve Witkoff and Jared Kushner ended past midnight, but according to the Kremlin, no compromise was reached on a possible peace deal for Ukraine.
Kremlin adviser Yuri Ushakov described the talks as “constructive,” but said key differences — especially over territorial issues such as the fate of the Donbas region — remain a major sticking point.
“Oil markets and prediction markets do not appear to price a large probability of a near-term peace agreement and removal of the sanctions on Russian oil,” Goldman Sachs analysts said in a note.
At the same time, Ukrainian forces continued to target Russian energy infrastructure, raising the risk of disruptions to Russian crude and fuel flows. That persistent threat to supply keeps a geopolitical risk premium alive for now, even as thawing diplomatic rhetoric offers hints of possible detente.
“Also, Moscow warns that it might start striking ships of countries supporting Ukraine. This threat comes in light of recent Ukrainian attacks on Russian vessels. It increases tensions amid ongoing discussions between Russia and the U.S. on Ukraine,” ING analysts said in a note.
U.S. crude stocks decline – API
Meanwhile, U.S. supply data added further complexity.
The latest weekly report from the American Petroleum Institute (API) showed a draw of 2.48 million barrels in U.S. crude stocks for the week ended November 28, a sharper decline than the prior week.
Large draws are viewed as bullish for crude prices, as they suggest an increase in consumption and a tightening of the market.
However, traders remain wary ahead of the official weekly data from the U.S. Energy Information Administration (EIA), expected later today, which will also report on gasoline and distillate stock changes.
Ayushman Ojha contributed to this article
