Oil Holds Near Month-Low As Trump Hails Progress On Ukraine Deal

Oil steadied after closing at a one-month low on signs a Ukrainian peace deal is getting closer, a development that could herald the removal of curbs on Russian crude just as a global glut looms.

West Texas Intermediate was near $58 a barrel after losing 1.5% Tuesday, while Brent closed above $62. US President Donald Trump said "there are only a few remaining points of disagreement," as he sent negotiators to more meetings, while the Ukrainian leader’s chief of staff said talks in Geneva had laid a “good foundation” for a deal.  

Much of Russia’s oil and fuel is subject to heavy Western sanctions, with US restrictions on the country’s two biggest producers kicking in last week. However, China, India and Turkey have been eager buyers of the discounted crude over the last few years, so the impact of any lifting of curbs on the Kremlin on global prices is hard to gauge.

Oil has fallen by more than a fifth since the middle of June as the Organization of Petroleum Exporting Countries and its allies restored barrels to the market and producers outside of the group also pumped more, while consumption remained muted. Supply will exceed demand by a record 4 million barrels a day next year, the International Energy Agency forecast this month.

In the US, meanwhile, a report from the American Petroleum Institute showed that nationwide crude inventories fell by a modest 1.9 million barrels last week. Official data are due later on Wednesday.