Oil holds near two-month low as supply concerns grow
Oil prices held near two-month lows on Wednesday as the prospect of a peace deal between Russia and Ukraine continued to weigh on prices while lower U.S. crude inventories provided little support.
Brent crude rose 16 cents, or 0.2%, to $73.18 a barrel by 0926 GMT. U.S. West Texas Intermediate crude futures rose 20 cents, or 0.3%, to $69.13.
The prospects for a peace deal between Russia and Ukraine are improving, ING commodity strategists said in a note on Wednesday, adding that the market was also looking at the potential implications of a minerals deal between the U.S. and Ukraine.
"This would bring us one step closer to the lifting of Russian sanctions, removing much of the supply uncertainty hanging over the market," the note said.
The U.S. and Ukraine have agreed on the terms of a draft minerals deal that is central to U.S. President Donald Trump's efforts to end the war in Ukraine, sources familiar with the matter told Reuters on Tuesday.
Supporting prices on Wednesday, U.S. crude stocks fell by 640,000 barrels in the week to Feb. 21, market sources said on Tuesday, citing data from the American Petroleum Institute. Official U.S. stockpile data is due on Wednesday. [API/S] [EIA/S]
"If confirmed by the EIA today, this would mark the first decline in U.S. crude inventories since mid-January," ING said.
Analysts polled by Reuters had forecast that U.S. crude stocks rose by 2.6 million barrels last week.
Oil prices have been weighed down by concerns that Trump's decision on tariffs on China and other trading partners could hurt economic growth.
Source: Bloomberg
