By Erwin Seba
HOUSTON (Reuters) -Oil prices fell on Thursday as the administration of U.S. President Donald Trump pushed for Ukraine’s acceptance of a peace agreement with Russia to end a war that has gone on for more than three years.
Brent crude futures were down 32 cents, or 0.5%, at $63.19 a barrel by 11:54 a.m. CDT (1754 GMT). U.S. West Texas Intermediate crude futures fell 47 cents, or 0.79%, to $58.97.
Both benchmarks rebounded earlier in Thursday’s session on a larger-than-expected draw on U.S. crude supplies, reported on Wednesday by the U.S. Energy Information Administration.
The U.S.-Russia peace proposal includes concessions of Ukrainian territory to Russia and reductions in Ukraine’s armed forces, both of which Ukraine’s President Volodymyr Zelenskiy has previously rejected.
On Thursday, Zelenskiy said he would look over the proposal and confer with the United States about the peace plan.
“A lot of people thought this new proposal would be dead on arrival with Zelenskiy, but he didn’t dismiss it out of hand,” said Phil Flynn, senior analyst with Price Futures Group. “Now the billion-dollar question is are the sanctions going to go into effect tomorrow? If they are close they might get lifted or delayed.”
U.S. sanctions on trading with Russian oil companies Rosneft and Lukoil come into effect on Friday, while Lukoil has until December 13 to sell its sprawling international portfolio.
The bigger-than-expected draw in U.S. crude stockpiles reflected increased refining in response to strong margins and export demand for U.S. crude. [EIA/S]
Crude inventories fell by 3.4 million barrels to 424.2 million in the week ended November 14, the Energy Information Administration said, against a draw of 603,000 barrels projected by analysts in a Reuters poll.
That said, analysts also noted that U.S. gasoline and distillate stockpiles increased for the first time in more than a month, suggesting slowing consumption.
(Reporting by Shadia NasrallaAdditional reporting by Enes Tunagur in London, Katya Golubkova in Tokyo and Siyi Liu in Singapore; Editing by Nia WilliamsEditing by Ed Osmond and David Goodman)
