Oil prices rose on Wednesday as the American Petroleum Institute reported a decline in U.S. crude inventories, and investors awaited the next steps in negotiations to end the Ukraine war, with sanctions on Russian crude remaining in place for now.

Crude prices fell more than 1% on Tuesday amid optimism that a deal to end the war appeared closer. However, U.S. President Donald Trump acknowledged that Russian President Vladimir Putin may not want to reach a deal.

Brent crude rose 55 cents, or 0.8%, to $66.34 a barrel at 08:12 GMT. U.S. West Texas Intermediate crude for September delivery, which expires on Wednesday, rose 65 cents, or 1%, to $63. "(It seems) oil prices fall sharply one day, then rebound the next. The API report is positive, so I assume there will be price support from there," said Giovanni Staunovo, an analyst at UBS.

Crude oil inventories fell by 2.42 million barrels, according to market sources on Tuesday, citing American Petroleum Institute data, ahead of official data at 14:30 GMT. "Not so sure about a peace deal yet - we'll see if there's progress in the coming days," Staunovo added.

Trump said on Monday that he was arranging a meeting between Putin and Ukrainian President Volodymyr Zelenskiy, which would be followed by a trilateral summit between the three presidents.

Russia has not confirmed it will participate in the talks with Zelenskiy. "The likelihood of a quick resolution to the conflict with Russia now seems remote," said Daniel Hynes, senior commodity strategist at ANZ, in a note on Wednesday.

Oil also drew support from flooding at a major U.S. refinery.

BP said on Tuesday that operations at its 440,000-barrel-per-day refinery in Whiting, Indiana, were affected by flooding after severe thunderstorms, potentially weighing on crude oil demand at the facility - a major fuel producer for the Midwest market. (alg)

Source: Reuters