Oil prices edged higher on Wednesday (November 26th) ahead of the US Thanksgiving holiday, as US investors assessed the prospect of a supply glut and negotiations on a Russia-Ukraine peace deal.

Brent crude futures rose 42 cents, or 0.67%, to $62.9 a barrel at 2:10 PM ET (7:10 PM GMT). US West Texas Intermediate crude futures rose 50 cents, or 0.86%, to $58.45.

US crude inventories rose 2.8 million barrels to 426.9 million barrels last week due to a surge in imports, according to the Energy Information Administration (EIA) on Wednesday. Analysts had expected a rise of 55,000 barrels.

"We're definitely on the path to a pretty healthy supply glut, there's no doubt about that, and the increase in crude oil production is showing that," said John Kilduff, partner at Again Capital. U.S. net crude oil imports rose by 1.05 million barrels per day (bpd), according to the EIA, to 2.84 million bpd, the highest since early September.

U.S. energy companies this week cut the number of operating oil and natural gas rigs for the first time in four weeks, according to energy services firm Baker Hughes on Wednesday. OPEC+ is likely to keep production levels unchanged at its meeting on Sunday, three OPEC+ sources told Reuters on Tuesday.

Investors await further clarity on Russia and Ukraine negotiations.

Ukrainian President Volodymyr Zelenskiy told European leaders on Tuesday that he was ready to advance a U.S.-backed framework to end the war with Russia, which pushed Brent and WTI crude prices to their lowest levels in a month.

"The bottom line is, there is still no peace treaty, and it will be difficult to convince all parties to come to the table and sign one," said Andrew Lipow, president of Lipow Oil Associates. U.S. President Donald Trump said he had ordered his representatives to meet separately with Russian President Vladimir Putin and Ukrainian officials. A Ukrainian official said Zelenskiy is likely to visit the United States in the coming days to finalize the deal

"If reached, this deal could quickly lift Western sanctions on Russian energy exports," potentially pushing WTI prices to around $55, IG market analyst Tony Sycamore said in a client note. "For now, the market is still waiting for further clarity, but the risk appears to be lower prices unless the talks fail."

The UK, Europe, and the US have recently tightened sanctions on Russia, and India's purchases of Russian oil are expected to hit a three-year low in December. The Caspian Pipeline Consortium (CPC), which handles about 1.5% of the world's oil, said it resumed oil loading overnight, after suspending loading following a Ukrainian drone attack earlier this week. (alg)

Source: Reuters.com