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Investing.com -- Oil prices rose strongly Thursday after a larger-than-expected decline in U.S. crude inventories, which overshadowed reports of a new peace plan for Ukraine.
At 07:40 ET (12:40 GMT), Brent Oil Futures expiring in January rose 1.1% to $64.19 per barrel, and West Texas Intermediate (WTI) crude futures gained 1.1% to $59.92 per barrel.
U.S. crude stockpiles drop more than expected - EIA
Data from the U.S. Energy Information Administration showed crude inventories fell by 3.4 million barrels in the week to Nov. 14, a much bigger draw than analysts’ expectations of 0.6 million.
"The decline was driven by stronger crude exports, which grew 1.34m b/d week on week. Refiners also increased run rates, leading to stronger crude oil inputs," ING analysts said in a note.
Gasoline stocks rose by 2.3 million barrels, and distillate inventories increased by 171,000 barrels, suggesting a softer demand profile in refined products despite tighter crude balances.
The surprise draw supported prices, but the build in gasoline and distillates tempered optimism about U.S. consumption.
New Russia-Ukraine peace plan in discussions
Market focus have also turned to geopolitical developments as Washington prepares to enforce new sanctions on Russia’s Rosneft and Lukoil from Nov. 21. The measures are aimed at curbing Moscow’s energy revenues and tightening restrictions on global flows of Russian crude.
Separately, reports this week indicated that U.S. and Russian officials have been working on a new proposal aimed at ending the conflict in Ukraine.
A Reuters report on Wednesday said that the U.S. has told President Volodymyr Zelenskiy that Ukraine should accept a U.S.-drafted peace outline that would require Kyiv to cede territory and some weapons.
The initiative could reshape expectations for Russian oil supply if it leads to a diplomatic breakthrough.
"Signs that the US is still trying to work on a deal eases some concerns over further sanctions against Russia and also how strongly current curbs will be enforced," ING analysts added.
Ayushman Ojha contributed to this article