Oil up 3% on tight supply, prospects of new Russia sanctions | Reuters

Oil up 3% on tight supply, prospects of new Russia sanctions | Reuters

Oil prices gained about 3% on Wednesday as another U.S. crude stock drawdown indicated tight supplies and investors worried about new Western sanctions against Moscow with Russian forces continuing to bomb the outskirts of Ukraine's capital.

On Tuesday, Russia promised to scale down operations around Kyiv in what the West dismissed as a ploy to regroup by invaders suffering heavy losses. read more

"After being fooled once, many traders that sold contracts in response to the peace talks are unlikely to make the same mistake the next time a Russia-Ukraine meeting is followed by optimistic comments," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Brent futures rose $3.22, or 2.9%, to settle at $113.45 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $3.58, or 3.4%, to settle at $107.82.