Oil prices hit one-week high on Trump warning over Russia, strong Japan data

SINGAPORE: Oil prices moved slightly higher on Friday, touching their highest level in a week, after US President Donald Trump cautioned that Russia would face “consequences” if it blocked a Ukraine peace deal. The warning added fresh concerns about potential supply disruptions.

Market sentiment also improved following upbeat economic data from Japan, one of the world’s largest importers of crude oil.

By 0017 GMT, Brent crude futures rose 16 cents, or 0.2 percent, to $67.00 a barrel. US West Texas Intermediate (WTI) crude futures climbed 14 cents, also 0.2 percent, to $64.10.

Focus on Alaska meeting

Traders are watching closely for the outcome of Friday’s meeting between Trump and Russian President Vladimir Putin in Alaska, where securing a ceasefire in Ukraine is a key topic. A prolonged conflict would likely keep Russian oil supplies tight, supporting prices. Trump, however, said he believed Russia was ready to end the war.

On the economic front, Japanese government figures released on Friday showed the economy grew at an annualised rate of 1.0 percent in the April to June quarter, beating market forecasts of 0.4 percent. On a quarterly basis, GDP rose 0.3 percent, compared with an expected 0.1 percent increase. Stronger economic growth often leads to higher oil demand.

Even so, concerns over US interest rates capped further gains. Higher-than-expected inflation and weaker jobs data have fuelled expectations that the Federal Reserve will keep rates elevated for longer, a trend that can limit oil consumption.

Read next: Gold set for weekly loss as US inflation dims big rate cut hopes