Oil prices edged higher on Friday as fading hopes for a peace deal between Russia and Ukraine boosted the risk premium in energy markets, putting crude on track to snap a two-week losing streak.
Brent crude futures climbed 12 cents to $67.79 a barrel at 06:33 GMT, while West Texas Intermediate (WTI) rose 13 cents to $63.65. Both benchmarks had gained more than 1% in the prior session. For the week, Brent was up 2.7% and WTI 1.1%.
Traders are pricing in renewed geopolitical risk as optimism wanes that U.S. President Donald Trump can quickly mediate an end to the Russia-Ukraine conflict. Analysts at ING noted that efforts to arrange a Putin-Zelenskiy summit have stalled, while talks on potential security guarantees remain unresolved. They added that fading ceasefire prospects increase the risk of tougher U.S. sanctions on Russia.
The war, now in its fourth year, showed no sign of slowing. Russia launched an airstrike near the EU border, while Ukraine reported hitting a Russian oil refinery. Meanwhile, U.S. and European security advisers have discussed military contingency plans. Sources said President Vladimir Putin is demanding Ukraine surrender the Donbas region, renounce NATO membership, and restrict Western troops. President Trump has pledged to guarantee Ukraine’s security in any peace agreement, but President Volodymyr Zelenskiy rejected giving up sovereign land.
Oil was further supported by a stronger-than-expected drawdown in U.S. crude inventories. The Energy Information Administration (EIA) reported a 6 million-barrel decline in the week ending August 15, far exceeding analyst expectations of 1.8 million barrels, signaling robust demand.
Markets also focused on the Jackson Hole economic symposium, where Federal Reserve Chair Jerome Powell is expected to give signals on the likelihood of a September rate cut. Lower borrowing costs could stimulate growth and boost global oil demand.
