Oil prices remained steady on Wednesday after sliding nearly 1% in the previous session, as global markets closely tracked the progress of Russia-Ukraine peace negotiations and prepared for a potential US interest rate cut.
Brent crude futures inched up by 7 cents (0.1%) to $62.01 per barrel at 0500 GMT, while US West Texas Intermediate (WTI) rose by the same margin to $58.32 per barrel.
Suvro Sarkar, lead energy analyst at DBS Bank, noted that oil markets are currently lacking clear direction. The minor boost from falling US crude inventories, as reported by the American Petroleum Institute (API), was outweighed by broader macroeconomic uncertainties.
According to API data shared by market sources, US crude inventories fell by 4.78 million barrels last week. However, gasoline stocks rose by 7 million barrels, and distillate inventories increased by 1.03 million barrels, indicating mixed demand signals.
Investors are now looking toward the US Federal Reserve, which is widely expected to cut its key interest rate by a quarter point. A lower interest rate typically boosts economic activity and can lift oil demand.
At the same time, traders remain focused on the Ukraine peace talks. Ukrainian President Volodymyr Zelenskiy said Ukraine and its European partners will soon present the US with “refined documents” on a peace plan aimed at ending the war. A successful peace deal could potentially lead to the easing of international sanctions on Russian energy companies, unlocking restricted oil supplies.
Despite potential diplomatic progress, analysts at ING warned that the market still risks slipping deeper into oversupply. Russian seaborne exports remain strong, but buyers are becoming scarce. If this trend continues, Russia may be forced to reduce production.
Meanwhile, the US Energy Information Administration (EIA) raised its 2025 forecast for annual crude output to 13.61 million barrels per day, a new record. However, expectations for 2026 output were trimmed slightly to 13.53 million barrels per day.
Overall, oil markets remain cautious as geopolitical events and monetary policy decisions continue to shape global demand and supply dynamics.
