Oil prices fell sharply today following a report of a US proposal to end the Russian war in Ukraine, as oversupply concerns continued to weigh on prices.
Brent crude futures fell $1.81, or 2.8%, to $63.08 a barrel by 1330 GMT, after gaining 1.1% the previous session.
US West Texas Intermediate crude futures fell $1.74, or 2.86%, to $59 a barrel, after rising 1.4% on Tuesday.
Prices extended declines on Wednesday after news of fresh efforts to end the war in Ukraine.
Ukraine has received "signals" about a set of US proposals to end the war that Washington has discussed with Russia, a senior Ukrainian official told Reuters on Wednesday. Ukrainian President Volodymyr Zelenskiy will hold talks in Turkey on Wednesday and meet US Army officials in Kyiv on Thursday in a new drive to revive peace negotiations with Russia.
If peace talks succeeded, it would reduce supply risks allowing the market to focus on current supply and demand dynamics, which point to an oversupplied market, Saxo Bank analyst Ole Hansen said.
Meanwhile, Russian Deputy Prime Minister Alexander Novak said that U.S. sanctions against Rosneft and Lukoil, imposed in October in retaliation for the stalling of peace talks on Ukraine, have not impacted oil production in Russia.
Risk of supply glut
The risk of a supply glut continued to weigh on prices along with falling gasoil futures on Wednesday following strong gains in recent sessions, Hansen added.
US crude stocks rose by 4.45 million barrels in the week ended November 14, while gasoline inventories climbed by 1.55 million barrels and distillate inventories increased by 577,000 barrels, market sources said late on Tuesday, citing American Petroleum Institute figures.
US sanctions on Rosneft and Lukoil set a November 21 deadline for companies to unwind their dealings with the major Russian producers.
The US Treasury said on Monday that the sanctions, already squeezing Russia's oil revenue, are expected to curb its export volumes. Crude buyers in China and India have already started switching to alternative suppliers.
