Oil prices advanced slightly during Asian trade on Thursday as traders braced for the outcome of Friday’s United States-Russia summit on Ukraine, amid concerns it could lead to tighter sanctions on Russian crude exports.
Gains were limited, however, by a subdued global market outlook.
By 3:45 pm AEST (5:45 am GMT), Brent crude futures were up 18 cents, or 0.3%, to US$65.82 per barrel, while U.S. West Texas Intermediate (WTI) crude futures added 19 cents, or 0.3%, to $62.84.
Both benchmarks had touched fresh two-month lows on Wednesday.
U.S. President Donald Trump warned on Wednesday of “severe consequences” if Russian President Vladimir Putin fails to agree to peace in Ukraine.
While he did not elaborate, Trump has previously signalled the possibility of imposing secondary tariffs on buyers of Russian crude - most notably China and India - should Moscow persist with its military campaign.
Meanwhile, expectations that the U.S. Federal Reserve will cut interest rates in September provided some additional support for oil.
Markets are almost certain that a reduction will occur following moderate inflation data for July, with some policymakers, including Treasury Secretary Scott Bessent, suggesting a more aggressive 50 basis-point cut is possible in light of weaker employment figures.
The CME Group FedWatch Tool places the odds of at least a quarter-point cut at 95.8% for the Fed’s September 16-17 meeting.
Lower rates could stimulate economic activity and boost oil demand.
Nevertheless, gains were capped by U.S. Energy Information Administration (EIA) data showing crude inventories unexpectedly rose by 3 million barrels in the week to August 8.
The International Energy Agency (IEA) also forecast that global supply growth in 2025 and 2026 will outpace earlier expectations, with higher OPEC output complemented by rising production from non-OPEC countries.
