Oil prices were stable on Friday as hopes for an imminent peace deal between Russia and Ukraine dimmed, putting prices on track for their first weekly gain in three weeks.
Brent crude futures were up 8 cents, or 0.1 per cent, at $67.75 a barrel by 0815 GMT. West Texas Intermediate (WTI) crude futures rose 12 cents, or 0.2 per cent, to $63.64.
Both contracts gained more than 1 per cent in the previous session. Brent has risen 2.8 per cent so far this week while WTI is up 1.4 per cent.
“Everyone is waiting for President Trump’s next step,” said UBS commodity analyst Giovanni Staunovo. “Over the coming days, it seems nothing will happen.”
The three-and-a-half-year war continued unabated this week as Russia launched an air attack near Ukraine’s border with the European Union on Thursday and Ukraine said it hit a Russian oil refinery and the Unecha oil pumping station, a critical part of Russia’s Europe-bound Druzhba oil pipeline. Hungary said deliveries through the pipeline had been halted.
Trump is seeking to arrange a summit between Russian President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelenskiy as part of efforts to broker a peace deal for Ukraine.
But arranging such a meeting appears challenging and discussions around potential security guarantees face obstacles, ING analysts said in a client note on Friday. The less likely a ceasefire looks, the more likely the risk of tougher US sanctions on Russia, they said.
Meanwhile, US and European planners have presented military options to their national security advisers after the first in-person meeting between the US and Russian leaders since Russia invaded Ukraine.
Putin demanded that Ukraine give up all of the eastern Donbas region, renounce NATO ambitions and keep Western troops out of the country, sources told Reuters.
Trump pledged to protect Ukraine under any war-ending deal and Zelenskiy dismissed the idea of withdrawing from internationally recognised Ukrainian land.
Larger than expected fall in US oil stocks
Oil prices were also supported by a larger than expected drawdown from US crude stockpiles in the past week, indicating strong demand. Stocks fell by 6 million barrels in the week ended August 15, the US Energy Information Administration said on Wednesday. Analysts had expected a draw of 1.8 million barrels. Weak economic data from Germany on Friday partially offset the stocks draw, showing that Europe’s largest economy shrank by 0.3 per cent in the second quarter, raising concerns over oil demand.
Investors were also looking to the Jackson Hole economic conference in Wyoming for signals of a Federal Reserve interest rate cut next month. The annual gathering of central bankers began on Thursday and Fed Chair Jerome Powell speaks on Friday.
Lower interest rates can stimulate economic growth and increase oil demand, potentially boosting prices.
