Oil prices extended gains for a second consecutive day as investors weighed prospects of a Ukraine ceasefire against signs of global oversupply.

Brent crude traded above $63 a barrel after rising 0.9% in the previous session, while West Texas Intermediate (WTI) hovered near $60. Ukrainian negotiators are set to travel to Florida for a new round of talks, though Russian President Vladimir Putin stated that certain terms in the U.S.-backed peace plan remain unacceptable.

Markets are closely monitoring the negotiations. A potential deal could lead to eased sanctions on Russia and increased crude exports, though the likelihood of an agreement remains slim. Additional supply risks pressuring oil prices—already poised for a steep annual decline due to oversupply concerns.

Global oversupply continues to weigh on prices: Saudi Aramco will cut January prices for its flagship Arab Light crude to the lowest level since 2021, while Canadian crude prices have also dropped sharply.

"The bearish trend may resume as fundamentals point to an oversupplied market," said Zhou Mi, an analyst at Chaos Ternary Futures Co.’s research institute. He added that Ukraine-related talks and U.S. rhetoric on Venezuela remain "market noise."

Meanwhile, traders are also watching Russia-India talks. Putin arrived in New Delhi for his first state visit since the Ukraine conflict began, with warming ties between the two nations drawing U.S. disapproval.