Oil prices were slightly higher on Wednesday as traders weighed possible Russia-Ukraine diplomacy against a lack of breakthroughs in Pakistani-Iranian talks. A larger-than-expected U.S. crude inventory draw added to supply concerns.
Brent futures for December climbed 0.6% to $109.52 a barrel by 15:25 ET. U.S. West Texas Intermediate futures for December rose 0.4% to $97.53 a barrel.
Russia and Ukraine talks stay in focus
The Kremlin said on Wednesday that U.S. Special Envoy Steve Witkoff met Russian President Vladimir Putin. According to the Kremlin's statement, Putin discussed a possible meeting in China with Witkoff.
Putin also told Witkoff that Russia was preparing diesel shipments, with the first tanker carrying 40,000 tonnes due to depart in a few days.
Iran impasse and Middle East risks keep markets on edge
Brent had touched an over five-month high on Tuesday on supply disruption fears, but turned lower after unconfirmed reports that Qatar and Pakistan had proposed reviving talks to end the Iran war. Iranian state media, however, said the president told Pakistan's army chief the U.S. must first lift the pressures, threats and sanctions for any negotiation.
Meanwhile, Reuters said 18 vessels had been targeted in the Strait of Hormuz over the past two weeks, citing Kpler data. Fighting between the Houthis and the Saudi Arabia-backed government in Yemen also kept markets uneasy.
David Morrison, senior market analyst at Trade Nation, said: "there’s a danger that crude prices become unanchored".
U.S. crude stocks fall again
U.S. commercial crude oil inventories excluding the Strategic Petroleum Reserve decreased by 3.1 million barrels in the week of October 16 to 412.5 million barrels, the Energy Information Administration said. Expectations had been for a modest decline of 100,000 barrels.
Total inventories including the SPR fell 3.4 million barrels to 695.2 million barrels, the lowest level since October 1983.
Source: Investing.com
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