Oil prices maintained stability yesterday, retracting from earlier gains after the Kremlin announced that Russian President Vladimir Putin would meet with U.S. President Donald Trump in the coming days, raising hopes for a diplomatic resolution to the conflict in Ukraine.
Brent crude futures rose by 21 cents, equivalent to 0.3%, reaching $67.10 per barrel, while West Texas Intermediate (WTI) climbed 20 cents or 0.3% to $64.55.
Both benchmark crude oils had experienced a drop of approximately 1% the day before, marking their lowest levels in eight weeks, following Trump’s comments regarding progress in discussions with Moscow.
Yuri Ushakov, an aide to the Russian president, indicated that Trump and Putin would meet soon, marking their first summit since 2021.
An official from the White House previously mentioned that Trump could potentially meet Putin next week, although the U.S. is continuing its preparations to impose secondary sanctions that may target China in order to pressure Moscow to conclude the war in Ukraine.
Giovanni Stonovo, an analyst at UBS, noted that oil prices had slightly increased due to declines in U.S. crude inventories, rising Saudi oil prices for Asia, and strong Chinese crude imports in July. However, he said that these gains were limited by news of the potential meeting between Trump and Putin next week. Russia ranks as the second-largest oil producer globally, following the United States.
The U.S. Energy Information Administration disclosed that crude oil inventories decreased by 3 million barrels to 423.7 million barrels for the week ending August 1, surpassing the expected drop of 591,000 barrels based on a Reuters poll of analysts.
In China, crude imports fell by 5.4% in July compared to June but remained up 11.5% year-on-year, with analysts forecasting that refining activity will stay robust in the near term.
Demand Strength
Saudi Arabia, the world’s leading oil exporter, raised its crude prices for September for Asian buyers yesterday, marking the second consecutive monthly increase due to limited supply and strong demand.
Nonetheless, global economic uncertainty has tempered gains following the recent imposition of a new set of tariffs on Indian goods by the U.S.
Trump announced a supplementary 25% tariff on Indian imports, attributing this decision to the country’s ongoing purchases of Russian oil. The new import tax will come into effect on August 28. Trump also hinted that he might impose additional tariffs on China.