Oil Pares Gain as Potential Trump-Putin Meet Eases Supply Fear
Oil pared gains on reports that President Donald Trump will meet Russian leader Vladimir Putin, easing concerns over US efforts to punish buyers of the nation’s crude.
Brent futures were little changed near $67 a barrel after Interfax reported that the two leaders have agreed to meet in the next few days, citing a Kremlin aide. On Wednesday, Trump doubled tariffs on Indian goods due to the nation’s Russian energy purchases, with implementation to begin in three weeks, in a push to end Moscow’s war against Ukraine.
Crude has moved lower in August following a run of three monthly gains. Traders are positioning for a potential glut later this year after OPEC+ returned millions of barrels of shuttered capacity to the market. In addition, there are concerns about a slowdown in economic growth and weaker energy consumption as Trump’s broader trade tariffs exact a toll, with a globe-spanning swathe of punitive levies coming into effect on Thursday.
“The current production and inventory surge will continue capping Brent in the early $70s, and once we have a solution to the current Russia-Ukraine peace issue, we expect to see a sharp move lower,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp.
Trump said on Wednesday there was a “very good chance” he would meet soon with Putin and Ukrainian leader Volodymyr Zelenskiy, in another bid to broker peace. While there’s been no move yet against China, another top importer, Trump said that was possible.
US data on Wednesday showed nationwide crude inventories fell 3 million barrels last week as refiners ran at the highest levels for the season since 2019. Still, crude holdings at the key Cushing hub extended a rebound from critical lows, expanding for a fifth week. That’s the longest run of builds since 2023.
In Asia, meanwhile, Saudi Arabia raised crude prices for a second month, signaling confidence in demand for its barrels as OPEC+ continues to ramp up supply. Last weekend, the cartel decided to add about 547,000 barrels-a-day of production back into the market for September.
Prices:
Brent for October settlement edged up 0.2% to $67.05 at 9:43 a.m. in London.
WTI for September delivery traded at $64.49 a barrel.
Source: Bloomberg
