Crude prices rose on Wednesday, reversing losses in the previous two sessions when trading tracked the news from Russia-Ukraine peace talks, but a fall in American crude stockpiles put the focus back on supply shocks ahead of the oil-producing nations' meeting.
The benchmark Brent crude March futures were last up nearly 3 per cent to trade over $113 per barrel, after having fallen 2 per cent in the previous session and about 7 per cent on Monday.
Brent prices at one point fell over 6 per cent to a low of $106 a barrel on Tuesday. Still, they reversed some of those losses after the American Petroleum Institute (API) industry group reported crude stocks fell by 3 million barrels in the week ending March 25.
US West Texas Intermediate (WTI) crude futures rose 3 per cent to over $107 a barrel, erasing a 1.6 per cent drop on Tuesday.
Positive news from the Russia-Ukraine peace talks has helped investors' sentiment, as reflected by increased risk appetite.
Most global equity markets reacted positively to Russia's promises to scale down its military operations near Kyiv and surrounding cities, though, on the ground, reports of attacks continued. Asian shares joined a global rally early on Wednesday as hopes rose for a negotiated end to the Russia-Ukraine conflict.
But Ukraine has reacted with scepticism to Russia's promise in negotiations to scale down military operations around Kyiv and other cities as some Western countries expected Moscow to intensify its offensive in other parts of the country.
"We can say the signals we are receiving from the talks are positive, but they do not drown out the explosions of Russian shells," Ukraine President Volodymyr Zelensky said in a late-night address.
Supply concerns after the API report offset the increase in risk appetite. Also, major oil producers are not expected to boost output above their agreed 400,000 barrels per day when the Organization of the Petroleum Exporting Countries and allies, including Russia, called OPEC+, meet on Thursday.
"We expect crude oil prices to remain volatile in today's session ahead of Thursday's OPEC+ meeting," said Rahul Kalantri, Vice President of Commodities at Mehta Equities.