Oil prices softened for the second straight session on Wednesday as global markets looked towards ongoing diplomatic discussions between Russia and Ukraine for clues on the future of crude supply.
Despite lingering geopolitical tensions, the prospect of a negotiated breakthrough, however uncertain, continues to influence sentiment.
By mid‑session, benchmarks were largely steady. Brent crude edged up by 2 cents, or 0.03 per cent, to $62.47 a barrel around 9:30 AM. US West Texas Intermediate (WTI) rose 3 cents, or 0.05 per cent, to $58.67, reported Reuters. ING analysts noted that Brent is now trading at its lowest levels since October, signalling a change in momentum after recent volatility.
Geopolitical Risks Still Loom
The modest decline comes "despite continued Ukrainian attacks on Russian energy infrastructure", ING said in a note. Moscow has also warned it may begin targeting ships belonging to nations supporting Kyiv, a threat that continues to cast a shadow over supply routes.
A five‑hour meeting between Russian President Vladimir Putin and senior envoys of US President Donald Trump failed to produce a compromise over a possible peace arrangement, according to the Russian government.
Markets are closely tracking these talks to assess whether sanctions on Russian energy giants such as Rosneft and Lukoil could eventually be rolled back.
But tensions escalated further after Putin accused European governments of obstructing diplomatic progress by insisting on proposals that would be "absolutely unacceptable" to Moscow. That has reinforced concerns that Russian crude may remain restricted to a handful of buyers, primarily China and India.
Fears of Oversupply Weigh on Prices
Even as geopolitical uncertainty persists, concerns of a crude surplus continue to pressure prices. "Worries about oversupply and soft demand continue to weigh on crude, which must hold above support in the mid‑$50s to avoid a deeper setback," said Tony Sycamore, market analyst at IG.
The conflict, now in its third year since Russia’s 2022 invasion, has widened in recent months with Ukraine launching frequent drone strikes on Russian oil facilities. Recent attacks on export terminals along the Black Sea have only heightened unease over supply disruptions.
Industry sources said the Caspian Pipeline Consortium (CPC), responsible for transporting crude from Russia and Kazakhstan, aims to complete repairs on a damaged single‑point mooring ahead of schedule. The move could help restore full export capacity after a recent drone strike.
Rising US Inventories Add to Pressure
Fresh data from the American Petroleum Institute (API) intensified supply‑side concerns. According to market sources, US crude inventories grew by 2.48 million barrels for the week ending November 28, while gasoline stocks rose by 3.14 million barrels and distillate inventories increased by 2.88 million barrels.
The US Energy Information Administration (EIA) is slated to release official government data later on Wednesday, which could further shape market direction.
Investors are now juggling multiple forces: fragile diplomacy, rising US stockpiles, and concerns about weakening demand. While any breakthrough in peace efforts could ease sanctions and unlock Russian crude supply, the uncertainty surrounding negotiations is keeping traders cautious.
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