Global crude benchmarks moved higher on Wednesday, as renewed worries over supply disruptions overshadowed earlier optimism that peace efforts in Ukraine might ease sanctions and boost exports from Russia.
Brent crude futures rose by 14 cents, or 0.21 per cent, to $65.93 per barrel close to 7:30 AM today morning. US West Texas Intermediate (WTI) crude futures for September delivery, which are due to expire on Wednesday, gained 37 cents, or 0.59 per cent, to $62.72, reported Reuters. The more active October WTI contract increased by 15 cents to $61.92 per barrel.
The upward movement comes after both benchmarks slipped by more than 1 per cent in the previous session. Tuesday’s decline had been driven by hopes of a breakthrough in negotiations that could lead to an end to Russia’s invasion of Ukraine, potentially lifting sanctions and restoring more crude supply to international markets.
Uncertainty Around Peace Efforts
While US President Donald Trump indicated on Tuesday that Washington could provide air support as part of an eventual deal, he also acknowledged that Russian President Vladimir Putin may not be inclined to pursue an agreement. Trump revealed he was arranging a meeting between Putin and Ukrainian President Volodymyr Zelenskiy, with the possibility of a trilateral summit to follow. He also mentioned discussing potential talks in Hungary with Prime Minister Viktor Orban. However, Moscow has yet to confirm its participation in such negotiations.
“The likelihood of a quick resolution to the conflict with Russia now seems unlikely,” said Daniel Hynes, senior commodity strategist at ANZ, in a note issued Wednesday.
US Refinery Disruption Adds to Supply Concerns
In the United States, additional pressure came from reports of disruptions at BP’s refinery in Whiting, Indiana. The facility, which has a refining capacity of 440,000 barrels per day and is a critical fuel supplier to the Midwest, experienced operational issues following severe thunderstorms and flooding on Tuesday night. The outage could further feed into broader supply concerns.
Outlook Remains Uncertain
With ongoing geopolitical instability, sanctions remaining in place, and disruptions in the refining sector, analysts suggest that oil prices are likely to remain volatile. Until there is clarity on the progress of Ukraine-Russia negotiations, the balance between supply risks and hopes for increased flows will continue to dictate market sentiment.
