Oil Holds Loss As Traders Weigh Next Steps On Russia-Ukraine War

Oil held a decline as traders weighed the outlook for an end to the war in Ukraine following high-level talks between the US and Russia, while attacks on Moscow’s energy assets continued.

West Texas Intermediate was below $59 a barrel after falling 1.2% on Tuesday. Brent closed near $62. The Kremlin said President Vladimir Putin held “very useful” talks with US envoys Steve Witkoff and Jared Kushner, though the sides failed to reach agreement on a plan to end Russia’s war in Ukraine.

The talks came against the backdrop of another attack on a Russia-linked ship, but it remains unclear who carried out the strike. Putin warned that Moscow may consider striking the vessels of countries supporting Ukraine if hits on the nation’s fleet do not stop, he told the state-run Rossiya 24 TV channel. 

"I am slightly surprised Brent is not a bit higher", following repeated attacks on Russian energy assets including refineries, said Robert Rennie, the head of commodity research at Westpac Banking Corp. The "overarching issue here is the market is becoming more focused on inventory build-up," he added.

Geopolitical tensions are keeping the market jittery and adding a risk premium to prices, partly countering concerns about a growing surplus. That includes US rhetoric against Venezuela, with President Donald Trump suggesting the Pentagon will soon start targeting drug cartels with strikes on land.

Meanwhile, an industry report showed nationwide US crude stockpiles increased by about 2.5 million barrels last week, while inventories of gasoline expanded. Government figures, including on demand, are due later Wednesday.