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Oil prices rose on Wednesday, recovering from one-month lows hit in the previous session, as investors weighed prospects of oversupply against tentative progress in Russia-Ukraine peace talks ahead of increased US travel for the Thanksgiving holiday.

Brent crude gained 65 cents, or 1.04%, to settle at $63.13 a barrel, while WTI rose 70 cents, or 1.21%, to $58.65.

US crude inventories expanded by 2.8 million barrels last week to 426.9 million barrels, according to the Energy Information Administration—well above market expectations of a 55,000-barrel rise, largely due to increased imports.

Despite the stock build, US energy firms continue to scale back output. Baker Hughes reported a decline of 12 active rigs to 407, the lowest level since September 2021, signalling a gradual correction toward supply-demand balance.

Prices remain sensitive to geopolitical developments. Earlier in the session, both Brent and WTI fell to one-month lows after Ukrainian President Volodymyr Zelenskiy indicated readiness to advance a US-backed framework to end the war with Russia.

The market now faces a delicate equilibrium between elevated US inventories, potential easing of geopolitical tensions, and seasonal US demand ahead of Thanksgiving, keeping price volatility elevated in the near term.

Written by: Farid Muzaffar