With Russia-Ukraine peace talks deadlocked and a strong US demand, oil prices rose 1%
As Russia and Ukraine attributed a stalled peace process to one another, and as earlier U.S. data indicated solid demand in the top oil-consuming country, oil prices increased by about a dollar a barrel on Thursday.
Futures for Brent crude increased 83 cents, or 1.2%, to close at a two-week high of $67.67 a barrel. U.S. West Texas Intermediate crude futures closed at $63.52 a barrel, up 81 cents, or 1.3%.
Over 1% was added to both contracts during the previous session.
After a two-week selloff on expectations that U.S. President Donald Trump will soon negotiate a diplomatic end to Russia’s war with its neighbor, oil dealers were cautious due to the uncertainty surrounding the path to peace in Ukraine.
Moscow and Kyiv have since accused one another of causing the peace talks to stall. Russia launched a significant airstrike Thursday close to Ukraine’s EU border, and Ukraine said it struck a Russian oil complex.
Clients of oil trading consulting firm Ritterbusch and Associates were informed on Thursday that “some geopolitical risk premium is slowly being pumped back into the market.”
The potential for further penalties against Russia has reappeared due to the unpredictability of the peace negotiations, according to Tamas Varga, an analyst with PVM Oil Associates.
Strong demand was also indicated by a greater-than-expected decrease from U.S. crude stockpiles in the past week, which helped to underpin oil prices.
The U.S. Energy Information Administration said Wednesday that U.S. crude stockpiles dropped 6 million barrels in the week ending August 15, compared to experts’ expectations of a loss of 1.8 million barrels.
“These tight domestic stockpiles stand in contrast to the oversupply outlook projected by both the IEA and EIA for 2026, challenging traders’ broader market expectations,” Alex Hodes, a StoneX analyst, told clients.
For clues about a potential Fed interest rate decrease next month, investors were also watching the Jackson Hole economic conference in Wyoming. The Fed Chair Jerome Powell is expected to speak on Friday at the annual meeting of central bankers, which starts on Thursday.
