Oil Prices Rise 2% ahead of fed decision and Trump-Putin talks
2025-08-15T05:47:46+00:00
Shafaq News
Oil prices climbed about 2% to a one-week high on Thursday after US President Donald Trumpwarned of "severe consequences" if his talks with Russian PresidentVladimir Putinon Ukraine fail, and on optimism that a likely US interest rate cut next month could spur oil demand.
Central banks, like the US Federal Reserve, use interest rates to control inflation. Lower rates reduce consumer borrowing costs and can boost economic growth and demand for oil.
Brent crude futures rose $1.21, or 1.8%, to settle at $66.84 a barrel, while US West Texas Intermediate (WTI) crude rose $1.31, or 2.1%, to settle at $63.96.
Those price gains pushed both crude benchmarks out of technically oversold territory for the first time in three days, and led Brent to its highest close since August 6.
On Tuesday, Brent closed at its lowest price since June 5 and WTI closed at its lowest price since June 2 due in part to bearish inventory and supply data from the US Energy Information Administration andthe International Energy Agancy said on Thursday he thought Putin was ready to make a deal on ending his war in Ukraineafter the Russian president floated the prospect of a on the eve of their summit in Alaska.
But on Wednesday, Trumpthreatened"severe consequences" if Putin does not agree to peace in Ukraine, without elaborating. Trump has warned of economic sanctions if the meeting on Friday proves fruitless.
Russia was the second-biggest producer of crude in 2024 behind the US, so any agreement that could ease sanctions on Moscow would likely boost the amount of Russian oil available for export to global markets.
Trump has threatened to enact secondary tariffs on buyers of Russian crude, primarily ChinaandIndia, if Russia continues its war in Ukraine.
"The uncertainty of US-Russia peace talks continues to add a bullish risk premium given Russian oil buyers could face more economic pressure," Rystad Energy said in a client note.
Some analysts, however, remained skeptical that Trump would take action that could significantly disrupt oil supplies.
Expecatations that the Fed will cut rates in September also propped up oil prices. Traders mostly believe a cut will happen next month after US consumer prices increased at a moderate pace in July.
US Treasury Secretary Scott Bessent said he thought an aggressive half-percentage-point cut was possible given recent weak employment numbers.
But a jump in is likely to bolster concerns among Fed policymakers that rising inflation remains a risk, intensifying debate over the rationale for an rate cut next month and leaving the tension between the US central bank and the White House unresolved.
In Europe, Norwegian oil and gas investments are expected to peak this year and start declining in 2026 as major projects are completed, a statistics office survey of industry players showed on Thursday.
Norway produces about 2% of global oil. It became Europe's largest supplier of pipeline gas after Russia's invasion of Ukraine in February 2022.
(Reuters)
Only the headline is edited by Shafaq News Agency.
