Oil prices fell during Asian trading on Thursday after official data revealed a much larger-than-expected increase in U.S. crude inventories. Hopes for progress on a U.S.-supported Ukraine peace plan also added pressure, as a potential agreement could allow more Russian supply to return to global markets.
By 21:19 ET (02:19 GMT), January Brent futures were down 0.25% at $62.84 per barrel, while West Texas Intermediate (WTI) crude slipped 0.4% to $58.40. Both benchmarks had gained more than 1% on Wednesday as traders boosted expectations of a Federal Reserve rate cut next month, which typically lends support to oil prices.
U.S. Crude Inventories Rise Sharply
The U.S. Energy Information Administration reported that crude stocks rose by 2.8 million barrels for the week ending November 21. Markets had expected only a small increase of about 55,000 barrels.
Gasoline inventories climbed by 2.5 million barrels, while distillate stocks increased by 1.1 million barrels, pointing to a mixed demand backdrop across the fuel segment.
According to analysts at ING, the build was partly driven by a sharp 560,000-barrel-per-day drop in crude exports, combined with a 486,000-barrel-per-day increase in imports.
These unexpected stockpile gains tempered recent price strength and reinforced concerns that global supply may exceed demand heading into 2026. The EIA and other forecasters continue to warn that rising output and growing inventories could weigh on oil prices next year.
Ukraine Peace Efforts Add Downside Pressure
Alongside the inventory data, diplomatic developments also influenced sentiment. The United States is pushing forward with a peace framework for the Russia-Ukraine conflict, and Ukrainian President Volodymyr Zelenskiy has expressed willingness to move the U.S.-backed plan forward.
U.S. envoy Steve Witkoff is set to visit Moscow next week to discuss the proposal. Such talks raise the possibility of a ceasefire or an agreement that may ease Western restrictions on Russian oil exports.
A deal of this kind would likely increase supplies in an already well-stocked market, adding further downside pressure on prices.
ING analysts noted that a peace agreement could remove much of the supply risk currently priced into the market and may even lead to the lifting of U.S. sanctions on Russia. They added that trading is likely to stay quiet due to the U.S. Thanksgiving holiday.
OPEC+ will meet this weekend, and analysts expect the group to keep production levels unchanged. They said the overall market outlook remains similar to the conditions seen at the previous meeting.
