SINGAPORE: Oil prices inched up on Wednesday as fears over tightening supplies resurfaced, with peace efforts to end Russia’s war in Ukraine expected to drag on. The uncertainty keeps sanctions on Russian oil in place and raises the risk of further restrictions on its buyers.
Brent crude futures rose 14 cents, or 0.21 percent, to $65.93 a barrel by 0149 GMT. US West Texas Intermediate (WTI) crude for September delivery, which expires on Wednesday, climbed 37 cents to $62.72 a barrel, up 0.59 percent. The more-traded October contract stood at $61.92 a barrel, up 15 cents.
The modest recovery came a day after both benchmarks fell more than 1 percent on optimism that a peace deal might be within reach. Such an agreement would ease sanctions on Russia and allow more oil into global markets.
Uncertain diplomacy
US President Donald Trump said on Tuesday that Washington could offer air support as part of a potential peace deal. Yet, he also admitted that Russian President Vladimir Putin may not be willing to compromise.
Trump earlier signalled he was arranging a meeting between Putin and Ukrainian President Volodymyr Zelenskiy, with plans for a possible three-way summit to follow. He also discussed hosting direct talks between the two leaders in Hungary with Prime Minister Viktor Orban.
So far, Moscow has not confirmed any participation in such talks. “The likelihood of a quick resolution to the conflict with Russia now seems unlikely,” noted Daniel Hynes, senior commodity strategist at ANZ.
Refinery disruption in the US
Adding to the supply picture, BP reported late Tuesday that operations at its 440,000-barrel-per-day refinery in Whiting, Indiana, had been disrupted by flooding after a severe thunderstorm. The facility is one of the Midwest’s largest fuel producers, and the outage could temporarily curb demand for crude.