LONDON: Oil rose on Wednesday as the American Petroleum Institute reported a drop in US crude inventories and investors awaited the next steps in talks to end the Ukraine war, with sanctions on Russian crude remaining in place for now.

Crude fell more than 1 percent on Tuesday on optimism that an agreement to end the war seemed closer. However, US President Donald Trump conceded that Russian President Vladimir Putin might not want to make a deal.

Brent crude futures rose 55 cents, or 0.8 percent, to $66.34 a barrel by 11:12 a.m. Saudi time. US West Texas Intermediate crude futures for September delivery, set to expire on Wednesday, gained 65 cents, or 1 percent, to $63.

“(It) seems oil prices are thrown down one day, followed by a rebound the next day. The API report was on the positive side, so I assume some price support is coming from that,” said Giovanni Staunovo, an analyst at UBS.

Crude stocks fell by 2.42 million barrels, market sources said on Tuesday, citing American Petroleum Institute figures, ahead of official data at 5:30 p.m. Saudi time.

“Not so sure about the peace deal — will have to see if something moves forward over the coming days,” Staunovo added.

Trump said on Monday he was arranging a meeting between Putin and Ukrainian President Volodymyr Zelensky to be followed by a trilateral summit among the three presidents.

Russia has not confirmed it will take part in talks with Zelensky.

“The likelihood of a quick resolution to the conflict with Russia now seems unlikely,” said Daniel Hynes, senior commodity strategist at ANZ, in a note on Wednesday.

Oil also found support from flooding at a large US refinery.

BP said on Tuesday operations at its 440,000-barrel-per-day refinery in Whiting, Indiana, were affected by flooding after a severe thunderstorm, potentially weighing on crude demand at the facility — a key fuel producer for the Midwest market