Oil prices gain on US trade optimism, drop in crude inventories
Brent crude futures had gained 52 cents, or 0.76%, to $69.03 a barrel by 1040 GMT. U.S. West Texas Intermediate crude futures climbed 60 cents, or 0.9% to $65.85 per barrel.
"The U.S. crude inventory draw and the trade efforts are adding some support to prices," said Janiv Shah, an analyst at Rystad.
Two European diplomats said on Wednesday that the EU and the United States were moving towards a trade deal that could include a 15% U.S. baseline tariff on EU imports and possible exemptions, potentially paving the way for another major trade agreement following the Japan deal.
On the supply side, U.S. Energy Information Administration data on Wednesday showed U.S. crude inventories fell last week by 3.2 million barrels to 419 million barrels, exceeding analysts' expectations in a Reuters poll for a 1.6 million-barrel draw.
Oil had also seen some support from a suspension of Azeri crude exports from the Turkish port of Ceyhan and a brief halt to loadings at Russia's main Black Sea ports which has since been resolved.
BP said that organic chlorides were detected in some of the oil tanks in the terminal at Ceyhan, adding that oil loading continued from some of the tanks with chloride levels assessed to be within normal specifications, while export activities via the BTC pipeline also continued.
But analysts expect oil price gains to remain limited.
"Uncertainty over U.S.-China trade talks and peace negotiations between Ukraine and Russia is limiting further gains," said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities, predicting WTI would likely remain range-bound between $60 and $70 a barrel.
Russia and Ukraine held peace talks in Istanbul on Wednesday, discussing further prisoner swaps, though the two sides remain far apart on ceasefire terms and a possible meeting of their leaders.
"Next to watch would be the demand indicators as we are in the peak season and any upside or downside would impact refining margins," Shah added.
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