Oil prices recover from two-month lows ahead of Trump–Putin talks
&imwidth=600&imheight=450&format=webp&quality=medium "Oil prices recover from two-month lows ahead of Trump–Putin talks")
A PetroChina worker inspects a pump jack at an oil field in Tacheng, Xinjiang Uighur Autonomous Region, China. Photograph: (Reuters)
Oil prices rebounded from two-month lows as traders weighed geopolitical risks from the upcoming Trump–Putin meeting, potential US rate cuts, and mixed supply signals.
Oil prices ticked higher on Thursday, regaining some ground after sliding to two-month lows in the previous session. As per Reuters, the rebound comes ahead of a high-stakes meeting between US President Donald Trump and Russian President Vladimir Putin, which has injected fresh geopolitical risk premiums into the market.
At 0057 GMT, Brent crude futures rose 28 cents, or 0.43 per cent, to $65.91 a barrel, while US West Texas Intermediate (WTI) crude gained 23 cents, or 0.37 per cent, to $62.89. Both benchmarks had plunged to their weakest levels since June after bearish supply forecasts from the US government and the International Energy Agency (IEA).
The Trump–Putin meeting, set for Friday in Alaska, has emerged as a focal point for traders. On Wednesday, Trump warned of “severe consequences” if Putin failed to agree to a peace settlement in Ukraine. While he did not specify the measures, he has previously threatened fresh economic sanctions should talks prove fruitless.
Geopolitics and Fed policy provide support
According to Rystad Energy, the uncertainty surrounding the US–Russia peace talks is fuelling a bullish risk premium, as Russian oil buyers could face greater economic pressure if tensions escalate. Adding to the upside, markets are now pricing in near certainty that the US Federal Reserve will cut interest rates in September. As quoted by Reuters, the CME FedWatch tool shows a 99.9 per cent probability of a quarter-point cut, with some investors expecting an aggressive half-point move given recent weak US jobs data. Treasury Secretary Scott Bessent has also signalled that deeper cuts are possible.
A weaker dollar, hovering near multi-week lows against the euro and sterling has further supported oil, making crude cheaper for holders of other currencies. Lower borrowing costs are generally seen as a boost for energy demand.
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Inventory build and supply forecasts cap gains
However, gains in oil prices were tempered by a surprise build in US crude inventories. The US Energy Information Administration reported an increase of 3 million barrels for the week ended August 8, against expectations in a Reuters poll for a 275,000-barrel draw.
Meanwhile, the IEA has forecast that global oil supply in 2025 and 2026 will grow faster than previously anticipated. As per Reuters, the agency cited higher production from OPEC+ and robust output from non-OPEC producers as key factors.
With geopolitical tensions, central bank policy shifts, and supply-demand forecasts all in play, oil markets are expected to remain volatile heading into the Trump–Putin meeting.
(With inputs from the agencies)