Oil prices edged higher on Wednesday on expectations of a decline in US crude inventories, though gains were capped by signs of potential progress in Ukraine peace talks that could ease restrictions on Russia's oil exports.
International benchmark Brent crude was trading at $61.91 per barrel at 10.12 a.m. local time (0712 GMT), up around 0.04% from the previous close of $61.88.
US benchmark West Texas Intermediate (WTI) also increased by about 0.05% to $58.24, compared to $58.21 in the prior session.
The American Petroleum Institute (API) estimated that commercial crude stocks fell by 4.8 million barrels last week.
Market expectations were for a decrease of around 1.7 million barrels. A sharper-than-expected drop in inventories supports the perception of strong demand in the US, one of the world's largest oil consumers, pushing prices higher.
US Energy Information Administration (EIA) will release official inventory data later in the day.
Expectations that the US Federal Reserve (Fed) will cut interest rates by a quarter point are also supporting prices, reinforcing prospects for economic growth and stronger oil demand.
Pricing in money markets shows an 86% probability of a 25 basis-point rate cut today, while a 50 basis-point cut is currently not priced in.
- Progress in peace talks monitored
Ukrainian President Volodymyr Zelenskyy, who is holding talks in Europe, said they are working with European allies on a peace plan and aim to submit the revised proposal to the US soon.
Zelenskyy emphasized that ending the war depends on Russia, adding: "We will be ready to send the revised documents (the peace plan) to the United States in the near future."
Possible progress in the negotiations could ease restrictions on Russia's oil exports and put downward pressure on prices. However, a stalemate or delay is expected to heighten geopolitical risks and support prices on the upside.
Meanwhile, the EIA revised upward its global oil price forecasts for 2026, taking into account developments in the markets.
According to the "December 2025 Short-Term Energy Outlook," the average barrel price is expected to reach $55.08 for Brent and $51.42 for WTI.
The report also noted that average daily crude oil production in the US will reach a record level of 13.61 million barrels this year.
By Humeyra Ayaz
Anadolu Agency
energy@aa.com.tr
