Oil holds at two-month low on rising supply concerns

LONDON: Oil prices held at two-month lows on Wednesday as a potential peace deal between Russia and Ukraine continued to weigh on prices while lower U.S. crude stockpiles provided some support.

Brent crude eased by 3 cents to $72.99 a barrel by 1142 GMT while U.S. West Texas Intermediate crude oil futures gained 3 cents to $68.96.

Prospects for a peace deal between Russia and Ukraine are improving, ING commodities strategists said in a note on Wednesday, adding that the market was also watching for potential implications of a minerals deal between the U.S. and Ukraine.

“This would take us a step closer to Russian sanctions being lifted, removing much of the supply uncertainty hanging over the market,” the note said.

The US and Ukraine agreed terms of a draft minerals deal central to U.S. President Donald Trump’s efforts to bring a swift end to the war in Ukraine, sources familiar with the matter told Reuters on Tuesday.

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Supporting prices on Wednesday, U.S. crude stocks fell by 640,000 barrels in the week ended February 21, market sources said on Tuesday, citing American Petroleum Institute data. Official U.S. stockpile data is due later on Wednesday.

“If confirmed by the EIA later today, it would mark the first decline in U.S. crude oil inventories since mid-January,” said ING.

Analysts polled by Reuters estimated that U.S. crude stocks rose by 2.6 million barrels last week.

Oil prices have been weighed down by concerns that Trump’s decisions on tariffs against

China and other trading partners could hamper economic growth.

That has eased worries about tighter near-term oil supply despite fresh U.S. sanctions against Iran, ANZ Bank analysts said in a note.