HOUSTON: Oil prices edged up on Friday as hopes of an imminent peace deal between Russia and Ukraine faded, putting prices on track for their first weekly gain in three weeks.
Brent crude futures were up 18 cents at $67.85 a barrel by 10:31 a.m. EDT (1431 GMT). West Texas Intermediate (WTI) crude futures gained 25 cents, or 0.39%, to $63.77.
Both contracts gained more than 1% in the previous session. Brent has risen 3.04% so far this week while WTI is up 1.5%. “Everyone is waiting for President Trump’s next step,” said UBS commodity analyst Giovanni Staunovo. “Over the coming days, it seems nothing will happen,” he added.
U.S. President Donald Trump on Friday said he will see if Russian President Vladimir Putin and Ukraine President Volodymyr Zelenskiy will work together in ending Russia’s war in Ukraine.
The three-and-a-half-year war continued unabated this week as Russia launched an air attack on Thursday near Ukraine’s borderwith the European Union, 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 Putin and his Ukrainian counterpart Zelenskiy as part of efforts to broker a peace deal for Ukraine.
Russian Foreign Minister Sergei Lavrov said there is no agenda for a potential summit between Putin and Zelenskiy, accusing Zelenskiy of saying “no to everything”.
The less likely a ceasefire looks, the more likely the risk of tougher U.S. sanctions on Russia, ING analysts said in a client note on Friday.
Meanwhile, U.S. and European planners have presented military options to their national security advisers after the first in-person meeting between the U.S. and Russian leaders sinceRussia invaded Ukraine.
Estonia is ready to participate in a peacekeeping operation in Ukraine with a force of up to one battalion, the Baltic country’s Prime Minister Kristen Michal said at a press conference with his Finnish counterpart in Tallinn on Friday.
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 U.S. crude stockpiles in the past week, indicating strong demand.
Stocks fell by 6 million barrels in the week ended August 15, the U.S. 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% 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.
U.S. Federal Reserve Chair Jerome Powell on Friday pointed to a possible rate cut at the central bank’s September meeting but stopped short of committing to cutting interest rates.
Lower interest rates can stimulate economic growth and increase oil demand, potentially boosting prices.
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