Oil prices flat but find support from falling US stockpiles

SINGAPORE: Oil prices held steady on Friday but were set to end a two-week losing streak, as hopes for an immediate peace deal between Russia and Ukraine faded, raising the risk premium in global energy markets.

At 0052 GMT, Brent crude futures slipped 4 cents to $67.63 a barrel, while West Texas Intermediate (WTI) eased 1 cent to $63.51. Both benchmarks had gained more than 1 percent in the previous session. For the week, Brent was up 2.7 percent and WTI 1.1 percent.

War weighs on markets

Traders had earlier priced in optimism that US President Donald Trump could help broker a quick peace. That hope has since dimmed. Instead, the war dragged into yet another week, now three and a half years long.

Russia carried out fresh airstrikes near Ukraine’s border with the European Union on Thursday. In response, Ukraine said it had struck a Russian oil refinery. The fighting underscored the gulf between the two sides, despite a meeting last weekend between US and Russian leaders.

Sources told Reuters that Russian President Vladimir Putin wants Ukraine to surrender the entire Donbas region, abandon NATO ambitions and bar Western troops from its soil. Ukraine’s President Volodymyr Zelenskiy flatly rejected the idea of giving up internationally recognised land.

Trump, meanwhile, pledged that any settlement would still ensure Ukraine’s security. US and European officials are also said to be drafting fresh military options, highlighting the fragile outlook for peace.

Demand outlook lifts crude

Beyond geopolitics, oil prices also found support from US inventory data. The Energy Information Administration reported a drop of 6 million barrels last week, far higher than analysts’ forecast of 1.8 million. The drawdown signalled stronger demand than expected.

Markets are also eyeing the Jackson Hole conference in Wyoming, where global central bankers are gathering. Investors will be watching closely for Federal Reserve Chair Jerome Powell’s speech on Friday for clues about a possible interest rate cut next month.

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