By Barani Krishnan

Investing.com — On Wednesday, oil longs tried to regain control over a market that plunged by the largest amount in one week after the outbreak of the pandemic. This was especially when peace talks between Russia-Ukraine are not progressing.

Data showing that crude stocks in the United States have been increasing weekly puts an end to any hope of a rebound.

U.S. crude’s , or WTI, benchmark was up 31 cents, or 0.3%, at $96.75 a barrel by 12:25 PM ET (16:25 GMT), rebounding from a session low of $94.64.

London-traded, which is the international benchmark for oil, fell 0.6% to $99.35/barrel, but it was still down 56c. Earlier in the session, Brent fell to $97.61, not far from Tuesday’s bottom of $97.50, which marked a low since Feb. 25. Brent reached a post-Ukraine Invasion high of $139.12 in March 7.

Crude displayed promise for a rebound Ukraine denied Russian claimsKyiv indicated that it was willing to accept a neutrality model similar to Sweden as part of a peace agreement.

Russian negotiators said Ukraine had offered to become a demilitarized state, but Kyiv denied this, saying it needed “legally verified security guarantees” to keep itself safe and would not accept any other model.

After the U.S. Embassy stated that Russian troops had “shot and killed 10 persons”, the Ukrainian government also adopted this stance. standing in line for bread” In northeast Ukraine.

“Some people are speculating because Russia is taking such heavy losses in Ukraine, that it’s looking for some type of an exit strategy from this war,” Phil Flynn, energy analyst at the Price Futures Group in Chicago said.

But oil’s chance of a stronger rebound was also foiled by weekly U.S. oil inventory data that wasn’t exactly supportive for longs in the market.

Data from Energy Information Administration revealed Wednesday that U.S. oil stocks rose for the first-time in four weeks. Refiners seemed to be returning to the national reserves some crude borrowed by the government to ease supply constraints and lower pump prices, which have been at their highest level in many years.

The government has loaned out more than 24 million barrels of crude since November to petroleum refiners to reduce the amount of oil they buy directly from the open market — in the hope that will cap prices for both the raw material and the fuel sold at pumps. With an extra amount, the government will compensate companies that get crude barrels from the exchange.

across the United States rose by 4.345 million during the week ended March 11, the EIA’s Weekly Petroleum Status Report showed. Strategic Petroleum Reserve showed a corresponding build of 4.3 million barrels from the first inflow in months to the nation’s emergency oil reserve.

After global market tightness in crude oil, as well as petroleum products, this month’s record gasoline prices at U.S. stations surpassed $4 per gallon. This was due to Western sanctions on Russia for the war against Ukraine.

Brent hit a new 14-year high of above $139 per barrel on March 7th, and then dropped to just $100 this week.

Apart from the build of reserves, Cushing hub in Oklahoma that receives crude from U.S. drilling wells had an inflow of 22.2 million barrels last Wednesday to reach 24.2 millions barrels according to the EIA data.

“To surmise, it was the first major build for both the SPR and Cushing in a while, and helps unwind some of the tight market psychology built around the two hubs,” said John Kilduff, founding partner at New York energy hedge fund Again Capital.

According to the EIA, stockpiles of this oil, which can be used as diesel in trucks, buses, trains, and ships, as well fuel for planes, increased by 332,000 barrels the week before.

Inventories of , known as petrol universally and America’s most-consumed oil product, were down 3.616 million barrels last week, sliding for a sixth week in a row.