08:45 AM EST, 11/20/2025 (MT Newswires) -- Oil prices rose early on Thursday, a day ahead of the start of U.S. sanctions on Russia's two largest oil producers as strong demand for refined products continues to offset rising supply.

West Texas Intermediate (WTI) crude oil for December delivery was last up US$0.59 to US$60.03 per barrel, while January Brent oil was up US$0.68 to US$64.19.

Oil has traded within a tight range for most of the past month, with WTI sticking near the US$60.00 as rising production within and outside the OPEC+ cartel builds global inventories while demand for refined products remains high amid lower Russian exports due to Ukrainian attacks on its refineries and falling refining capacity in the United States.

"In 2025, distillate strength ... partly originates from Russia, as the country's gasoil exports are plummeting due to Ukrainian strikes on its refineries and Western sanctions. But this is not the sole reason. Global and US refinery maintenance contributes to product tightness, as does a perceptible decline in US refining capacity. It fell from 18.35 mbpd in 2024 to 18.15 mbpd in 2025, with a further decline anticipated next year, when it could retreat to 17.92 mbpd, according to the EIA, impeding healthy US product exports," PVM Oil Associates wrote.

U.S. sanctions on Russia's two largest oil producers, Rosneft and Lukoil, take effect on Friday, also supporting prices as Russia's two-largest customers, China and India look to alternative sources for their imports. The sanctions come even as reports say the Trump Administration has drafted a plan to end Russia's war on Ukraine, demanding Ukrainian concessions without consulting Ukraine or its European allies.

"Headlines around a potential US-brokered peace initiative between Russia and Ukraine briefly pushed prices lower, only for the market to rebound as traders reassessed the impact of US sanctions on Russia's energy majors, which take effect on Friday," Saxo Bank wrote.

The rise also follows on Wednesday's weekly inventory report from the Energy Information Administration that showed a larger than expected drop in U.S. oil inventories.