Oil prices rose on Thursday as investors remained cautious ahead of a US-Russia summit in Ukraine on Friday, which could lead to an easing of sanctions on Russian crude or further action against its buyers.
However, a weak market outlook limited gains.
Brent futures rose 24 cents (0.37%) to $65.87 a barrel, while WTI rose 21 cents (0.34%) to $62.85. Both hit two-month lows on Wednesday after supply forecasts from the US government and the International Energy Agency (IEA) fell.
President Donald Trump warned of dire consequences if President Vladimir Putin did not agree to peace in Ukraine, including possible secondary tariffs on Russian oil buyers such as China and India.
Rystad Energy said uncertainty over the talks was adding to the market's risk premium.
According to ING, the expected oil oversupply at the end of this year and 2026 could reduce the impact of tariffs, but risks increase if restrictions are also imposed on other major buyers such as China and Turkey.
Expectations that the US Fed will ease monetary policy in September also support oil prices, as lower rates usually boost demand.
However, gains were capped by a surprise build in US crude inventories of 3 million barrels and the IEA's forecast that global supply in 2025-2026 will grow faster than expected.
