RoydadNaft –  Oil prices rose on Wednesday, recovering earlier losses as investors said Russia-Ukraine peace talks were unlikely to lead to the lifting of sanctions on Russian crude, although gains were limited by concerns about an overall supply glut.

Brent crude rose 26 cents, or 0.4 percent, to $62.71 by 0816 GMT, while U.S. West Texas Intermediate crude was up 29 cents, or 0.53 percent, at $58.95, according to Oil Event. Both contracts had fallen more than 1 percent in the previous session.

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“Oil and forecast markets do not seem to be pricing in a near-term peace deal and the lifting of sanctions on Russian oil,” Goldman Sachs analysts wrote in a note.

Russia and the United States failed to reach an agreement on a potential peace deal for Ukraine after a five-hour meeting between Russian President Vladimir Putin and top envoys from U.S. President Donald Trump, the Russian government said on Wednesday.

Oil markets are waiting to see whether a deal could lead to the lifting of sanctions on Russian companies, including oil giants Rosneft and Lukoil, which would free up pent-up oil supplies.

Putin’s accusations on Tuesday that European powers were undermining U.S. efforts to end the war by making proposals they knew were “completely unacceptable” to Moscow have raised concerns that Russian supplies will remain tight for buyers such as China and India as the talks fail to produce a deal.

Despite concerns that talks will not reach a conclusion, “concerns about oversupply and weak demand continue to weigh on crude oil prices, which need to hold above support in the mid-$50s to avoid a deeper pullback,” Tony Sycamore, a market analyst at IG, wrote in a note.

The war in Ukraine has escalated since Russia’s 2022 invasion, and Ukraine is now regularly attacking Russian oil infrastructure with drones.

Recent Ukrainian attacks on oil export sites on Russia’s Black Sea coast have highlighted geopolitical concerns stemming from the conflict.

A build in U.S. inventories has also fueled concerns about a crude glut.

U.S. crude and fuel inventories rose last week, the American Petroleum Institute reported on Tuesday, market sources said, citing API figures.

Crude oil inventories rose by 2.48 million barrels in the week ended Nov. 28, gasoline inventories rose by 3.14 million barrels and distillate inventories rose by 2.88 million barrels, the API said, citing sources.

The U.S. Energy Information Administration will release official government stockpile data later on Wednesday.