Oil prices rise on drop in US crude inventories as investors focus on Ukraine peace push

Oil prices climbed about 1% on Wednesday on a bigger-than-expected weekly drop in U.S. crude inventories as investors awaited the next steps in talks to end the Ukraine war, with sanctions on Russian crude remaining in place for now.

Brent crude futures were up 56 cents, or 0.9%, to $66.35 a barrel by 10:48 a.m. EDT (1448 GMT), while U.S. West Texas Intermediate (WTI) crude futures rose 66 cents, or 1.1%, to $63.01.

The U.S. Energy Information Administration said energy firms pulled 6.0 million barrels of crude from inventories during the week ended August 15. ,

That was bigger than the draw of 1.8 million barrels forecast by analysts in a Reuters poll and the decline of 2.4 million barrels that market sources said the American Petroleum Institute trade group cited in its figures on Tuesday.

"We had a decent-sized crude drawdown. We saw a rebound in exports ... That and the strong refinery demand really makes this a bullish report," said John Kilduff, partner with Again Capital.

On Tuesday, crude prices fell more than 1% - with WTI closing at its lowest level since May 30 - on optimism that an agreement to end the Russia-Ukraine war seemed closer.