Oil about to snap losing streak as Ukraine peace deal struggles

Oil prices held nearly steady on Friday, as hopes for an imminent peace deal between Russia and Ukraine faded, putting prices on track for their first weekly gain in three weeks.

Brent crude futures slipped 17 cents, or 0.25%, to $67.50 a barrel by 1000 GMT. US West Texas Intermediate (WTI) crude fell 13 cents, or 0.2%, to $63.39.

Both contracts had gained more than 1% in the previous session. Brent has risen 2.8% so far this week, while WTI is up 1%.

Giovanni Staunovo, commodity analyst at UBS, said: “Everyone is waiting for the next move from President Trump. In the coming days, it seems nothing will happen.”

The war, now in its third and a half year, showed no let-up this week. Russia launched an airstrike near Ukraine’s border with the European Union on Thursday, while Ukraine said it struck a Russian oil refinery and pumping station in Unecha, a vital part of the Druzhba pipeline that carries Russian oil to Europe. Hungary said supplies through the line had stopped.

Trump is seeking to arrange a summit between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky as part of his mediation efforts to reach a peace deal.

But arranging such a meeting appears difficult, while discussions over possible security guarantees are facing obstacles, analysts at ING wrote in a client note on Friday. They added: “The lower the chances of a ceasefire, the higher the risk of tougher US sanctions on Russia.”

Meanwhile, American and European planners presented military options to their national security advisers following the first direct meeting between US and Russian leaders since the invasion of Ukraine.

Putin has demanded that Ukraine abandon the entire eastern Donbas region, renounce ambitions to join NATO, and keep Western forces out of the country, according to sources who spoke to Reuters.

Trump has pledged to protect Ukraine under any deal to end the war, while Zelensky rejected any withdrawal from internationally recognized Ukrainian territory.

Larger-than-expected decline in US oil inventories

Oil prices also drew support from a bigger-than-expected drop in US crude stockpiles last week, signaling firm demand. Inventories fell by 6 million barrels in the week ending August 15, the US Energy Information Administration said on Wednesday, compared with analysts’ forecasts for a draw of just 1.8 million barrels.

This was partly offset by weak German economic data, which showed the eurozone’s largest economy shrank by 0.3% in the second quarter, raising concerns about oil demand.

Investors were also watching the Jackson Hole Economic Symposium in Wyoming for signals on a potential US interest rate cut next month. The annual gathering of top central bankers began on Thursday, with Fed Chair Jerome Powell scheduled to deliver his speech on Friday.

A rate cut could stimulate economic growth and boost oil demand, potentially supporting prices.