Brent crude futures rose 20 cents, or 0.31%, to $63.72 a barrel at 0714 GMT, while U.S. West Texas Intermediate (WTI) crude gained 22 cents, or 0.37%, to $59.66. Both benchmarks had fallen more than 2% on Wednesday after reports that the U.S. had urged Ukraine to accept a framework drafted by Washington to end the conflict, which could involve ceding territory and some weapons.
The market initially reacted to concerns that an end to the war could lead to the lifting of sanctions on Russian crude, increasing global supply amid rising production and oil stored on tankers. Analysts at ING, however, noted that Ukraine is unlikely to accept a plan favoring Russia, and continued U.S. efforts to negotiate a deal provide some reassurance over the enforcement of sanctions.
Supporting Thursday’s gains was data from the U.S. Energy Information Administration showing crude stockpiles fell by 3.4 million barrels in the week ended November 14 to 424.2 million barrels, far exceeding analysts’ expectations of a 603,000-barrel draw. The decline reflects higher refining activity, strong export demand, and attractive refining margins.
Nonetheless, analysts cautioned that gasoline and distillate inventories in the U.S. rose for the first time in over a month, signaling a potential slowdown in consumption.
Traders are also watching a November 21 deadline for U.S. companies to wind down operations with Russian oil giants Rosneft and Lukoil, which were sanctioned as part of Washington’s efforts to pressure Moscow amid the war in Ukraine.