Crude prices drifted lower in Asian trade on Thursday, weighed down by government data showing a far larger-than-expected jump in U.S. oil inventories. Additional pressure came from progress on a Washington-backed peace initiative for Ukraine, which raised the possibility of more Russian barrels finding their way back into global markets.

By 21:19 ET (02:19 GMT), January Brent futures were down 0.25% at $62.84 a barrel, while West Texas Intermediate (WTI) slipped 0.4% to $58.40 a barrel.

Both benchmarks had climbed more than 1% on Wednesday as traders boosted expectations for a Federal Reserve interest rate cut next month — a scenario that typically provides support for crude.

U.S. Crude Inventories Rise Sharply — EIA

The U.S. Energy Information Administration reported Wednesday that crude stocks increased by 2.8 million barrels for the week ending Nov. 21, well above consensus forecasts for a modest 55,000-barrel build.

Gasoline inventories also rose by 2.5 million barrels and distillate stockpiles grew by 1.1 million barrels, pointing to a mixed demand backdrop across fuel markets.

As ING analysts noted, “The increase was driven by a 560k b/d week-on-week decline in crude exports, while imports were up 486k b/d.”

The unexpectedly large inventory gains capped oil’s recent upside and reinforced worries that supply may exceed demand heading into 2026. The EIA and other major forecasters have warned that rising production and swelling stockpiles could keep pressure on prices next year.

Ukraine Peace Efforts Add Downside Pressure

At the same time, the U.S. is continuing to push forward on a peace proposal for the Russia–Ukraine conflict, and Ukrainian President Volodymyr Zelenskiy has indicated he is prepared to move ahead with the U.S.-supported framework.

U.S. envoy Steve Witkoff is expected to travel to Moscow next week to discuss the plan — a development that has raised hopes for a ceasefire or broader agreement that might ease Western restrictions on Russian energy flows.

Any such shift would likely boost supply in an already well-stocked market, adding further downside risk to prices.

As ING analysts wrote, “A peace deal would likely remove much of the supply risk facing the market, potentially leading to the lifting of US sanctions on Russia. For today, though, market action is likely to be relatively muted due to the US Thanksgiving holiday.”

Looking ahead to the producer side, ING added, “OPEC+ is set to meet this weekend. We believe the group will leave production unchanged. The fundamental outlook remains fairly similar to where it was at the group’s last meeting.”

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