Oil prices remained stable on Thursday as investors assessed the potential effects of the upcoming U.S.-Russia summit in Alaska on Friday, which focuses on the Ukraine conflict and its implications for Russian crude exports. By 1202 GMT, Brent crude futures increased by 25 cents to $65.88 a barrel, while U.S. West Texas Intermediate rose by 26 cents to $62.91. Both contracts had recently hit a two-month low following bleak supply forecasts from the U.S. government and the International Energy Agency (IEA).
President Donald Trump warned of “severe consequences” for Russia if it fails to pursue peace in Ukraine, though he did not detail specific repercussions. He has indicated that economic sanctions could target Russian crude buyers, particularly China and India, should the talks falter. Analysts at Rystad Energy noted that the uncertainty surrounding the U.S.-Russia negotiations is adding a bullish risk premium to oil prices, as buyers of Russian oil may face increased economic pressure.
Conversely, some experts expressed doubt about Trump’s willingness to implement measures that could severely disrupt oil supplies, suggesting that such actions might backfire politically. Additionally, expectations of a potential interest rate cut by the U.S. Federal Reserve in September provided further support for oil prices, as lower borrowing costs could stimulate economic growth and fuel demand. However, crude inventories in the U.S. unexpectedly rose by 3 million barrels last week, which kept oil prices in check.