Oil Prices Head for Weekly Gains as Ukraine Peace Talks Stall and U.S. Stockpiles Fall
Oil prices steadied on Friday, remaining on track for their first weekly gain in three weeks, as uncertainty over a potential Russia-Ukraine peace deal and strong U.S. demand shaped market sentiment.
As of 1:00 p.m. EDT (1700 GMT), Brent crude futures slipped 3 cents to $67.64 per barrel, while West Texas Intermediate (WTI) futures edged up 5 cents to $63.57. Despite the modest moves, both benchmarks recorded gains of more than 1% in the previous session. Brent has climbed 2.7% this week, with WTI up 1.2%.
Market analysts pointed to heightened geopolitical uncertainty as a key factor. “Everyone is waiting for President Trump’s next step,” said UBS analyst Giovanni Staunovo, noting that negotiations between Russia and Ukraine are moving slower than markets expected. Trump has indicated he will seek to arrange a summit between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy to push forward peace efforts.
However, Russia’s continued attacks near the EU border and Ukraine’s strikes on Russian oil infrastructure have fueled concerns. Supplies to Hungary and Slovakia could face a five-day disruption, raising the risk of tougher U.S. sanctions if a ceasefire remains elusive.
Meanwhile, support for oil prices also came from stronger U.S. demand. The Energy Information Administration (EIA) reported a drawdown of 6 million barrels from U.S. crude stockpiles in the week ending August 15, far exceeding analyst expectations of a 1.8 million barrel decline.
On the macroeconomic side, weak data from Germany, which showed a 0.3% contraction in Q2, tempered optimism and raised concerns over global oil demand. At the same time, investors focused on the Jackson Hole economic symposium, where Federal Reserve Chair Jerome Powell signaled that a rate cut could be on the table at the central bank’s next meeting. Lower interest rates often support economic activity, which in turn can lift oil demand and prices.
With geopolitical risks, falling U.S. stockpiles, and expectations of Fed easing all in play, oil markets remain on track for weekly gains, despite lingering uncertainty over Ukraine’s peace process.
