Oil held a two-day advance as investors weighed the outlook for a ceasefire in Ukraine, and signs of a swelling global surplus.
Brent traded above $63 a barrel after rising 0.9% in the previous session, while West Texas Intermediate was near $60. Ukrainian negotiators will join a new round of talks in Florida, while Russian President Vladimir Putin said some of the points in a US-backed peace plan were unacceptable to him.
The market is watching for progress on a deal, which could potentially lead to sanctions being lifted on Russia and more oil exports, though reaching an actual agreement appears distant at this stage. Additional supply would likely weigh on prices, which are already on track for a hefty annual loss on glut concerns.
Oversupply is putting pressure on prices globally: Saudi Aramco will reduce the price of its flagship Arab Light crude grade to the lowest level since 2021 for January, while Canadian oil has tumbled.
The “bearish trend is likely to resume, because fundamentally, crude is in a state of oversupply,” said Zhou Mi, an analyst at a research institute affiliated with Chaos Ternary Futures Co. The talks on Ukraine and US rhetoric against Venezuela are “market noise,” he added.
Meanwhile, traders are also focused on Russia-India talks after Putin arrived in New Delhi for his first state visit since the full-scale invasion of Ukraine. Warming ties between the two nations have angered the US.