Oil Gains as Traders Weigh the Next Steps in Russia-Ukraine War
AdamSummary:
Oil rises as US–Russia talks fail to end the Ukraine war, attacks on Russian assets continue, and geopolitical tensions add a risk premium despite growing US crude inventories.
Oil rose as traders weighed talks between the US and Russia that have so far failed to end the war in Ukraine, while attacks on Moscow’s energy assets continued.
Brent traded near $63, though prices have been lacking direction in recent days. The Kremlin said President Vladimir Putin held “very useful” talks with US envoys Steve Witkoff and Jared Kushner, though the sides failed to reach agreement on a plan to end the conflict in Ukraine. European defense stocks rose and Ukrainian bonds fell.
The talks came against the backdrop of another attack on a Russia-linked ship, but it remains unclear who carried out the strike. Putin warned that Moscow may consider striking the vessels of countries supporting Ukraine if hits on the nation’s fleet do not stop, state-run Rossiya 24 TV channel reported.
“The Brent crude price remained roughly unchanged in the low $60s over the last week as Russia-Ukraine peace talks continue,” Goldman Sachs Group Inc. analysts including Yulia Zhestkova Grigsby said. “Oil markets and prediction markets do not appear to price a large probability of a near-term peace agreement and removal of the sanctions on Russia oil.”
Geopolitical tensions are keeping the market jittery and adding a risk premium to prices, partly countering concerns about a growing surplus. That includes US rhetoric against Venezuela, with US President Donald Trump suggesting the Pentagon will soon start targeting drug cartels with strikes on land.
Meanwhile, an industry report showed nationwide US crude stockpiles increased by about 2.5 million barrels last week, while inventories of gasoline expanded. Government figures, including on demand, are due later Wednesday.
Source: Bloomberg
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