Oil prices steadied on Wednesday after a sharp decline in the previous session as traders balanced concerns about a potential oversupply in 2026 with new diplomatic activity surrounding a possible Russia-Ukraine peace framework.
Brent crude oil, against which Nigerian crude oil is priced, was slightly firmer in midday trading, hovering around the mid-$62 range, while U.S. West Texas Intermediate traded in the upper $58 zone.
The modest uptick followed a one-day slide that pushed both benchmarks to their lowest levels in nearly a month.
Market analysts say sentiment remains fragile, with traders increasingly positioning for a market that could tip into surplus next year.
Forecasts pointing to weaker consumption growth, combined with stronger output expectations from several non-OPEC suppliers, have contributed to growing uncertainty about demand strength in the months ahead.
The geopolitical landscape added another layer of complexity after fresh indications that progress was being made in negotiations aimed at ending the Russia-Ukraine conflict.
Statements from officials on both sides suggested that only a narrow set of issues remain unresolved in a U.S.-supported proposal currently under discussion.
A breakthrough in the talks could reshape global supply flows. A peace deal that leads to the relaxation of sanctions on Russian energy shipments would allow Moscow to expand exports into traditional and new markets, adding further volume to a market already bracing for increased supply.
Analysts warn that such an outcome could exert additional downward pressure on crude prices unless counteracted by stronger-than-expected demand.
In the U.S., attention shifted to upcoming stockpile figures following industry data showing a drop in crude inventories but an increase in refined product stocks.
The market is awaiting new figures from the Energy Information Administration, which could provide clearer direction on near-term supply-demand balances.
Regional developments also played a role in market expectations. The Caspian Pipeline Consortium confirmed that it had resumed loadings after a brief suspension linked to a drone strike earlier in the week.
Meanwhile, initial signals from OPEC+ sources indicate that the group is likely to maintain current production levels at its upcoming meeting, reinforcing expectations of a steady output stance.
Despite Wednesday’s stabilisation, traders say the short-term outlook remains cautious. Until there is clarity on the geopolitical discussions and a firmer read on supply fundamentals, oil prices may continue to trade within a narrow range, with a bias toward softness if peace negotiations advance.