Oil prices rose on Wednesday (December 3) after the US and Russia failed to reach a deal to end the war in Ukraine that would have eased sanctions on Moscow's oil sector, although gains were tempered by concerns about oversupply.

Brent crude closed up 22 cents, or 0.4%, at $62.67, while U.S. West Texas Intermediate crude rose 31 cents, or 0.5%, to $58.95. Both contracts fell more than 1% in the previous session.

U.S. crude, gasoline, and distillate stocks rose last week, the Energy Information Administration (EIA) said on Wednesday, adding to concerns about oversupply.

Crude inventories rose by 574,000 barrels in the week ending November 28, according to the EIA, compared with analysts' expectations in a Reuters poll for a decrease of 821,000 barrels.

Gasoline stocks rose by 4.52 million barrels, far exceeding analysts' expectations in a Reuters poll for a 1.5 million-barrel increase. Distillate stocks, which include diesel and heating oil, rose by 2.1 million barrels, also exceeding expectations for a 0.7 million-barrel increase. The data was delayed and not released at 10:30 a.m. ET (15:30 GMT) as expected, citing technical difficulties.

"Overall, global supplies remain quite abundant. The market is adjusting, as the Ukraine-Russia peace agreement will be delayed," said Dennis Kissler, senior vice president of trading at BOK Financial.

"The market remains in a very tense trading environment because we are facing major geopolitical issues." Russia and the US failed to reach a compromise after a five-hour meeting between Russian President Vladimir Putin and US President Donald Trump's top envoy, the Russian government said on Wednesday.

The oil market is awaiting the outcome of the talks to see if the agreement could lead to the lifting of sanctions on Russian companies, including major oil companies Rosneft and Lukoil, which would free up restricted oil supplies.

Putin said on Tuesday that European powers were obstructing US efforts to end the war by putting forward proposals they knew were "absolutely unacceptable" to Moscow

Recent Ukrainian attacks on oil export sites on Russia's Black Sea coast have highlighted geopolitical concerns stemming from the war. Ukraine also attacked two sanctioned tankers involved in transporting Russian oil in the Black Sea last week.

Putin said on Tuesday that Russia would take action against tankers from countries that aid Ukraine, adding to geopolitical risks, analysts said. (alg)

Source: Reuters.com