Oil prices edged lower in Asian trading on Friday as investors remained cautious ahead of signals on U.S. monetary policy from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium.
Despite the minor pullback, crude was on track for a weekly gain, supported by mounting signs that peace negotiations between Russia and Ukraine are stalling, heightening concerns over potential supply disruptions.
Stronger-than-expected U.S. demand also provided support. Data showed a draw of 6 million barrels from U.S. inventories in the week to August 15, exceeding forecasts and signaling robust domestic fuel consumption.
By 21:20 ET (01:20 GMT), Brent crude futures declined 0.2% to $67.51 a barrel, while West Texas Intermediate (WTI) crude futures fell 0.3% to $62.95 a barrel.
Weekly Gains Driven by Stalled Peace Talks
Brent and WTI have climbed between 1.5% and 3% so far this week, largely recovering losses from the early part of the week. Oil initially fell as U.S. diplomatic efforts to broker a Russia-Ukraine peace appeared to advance, but markets are increasingly skeptical that a deal will materialize soon.
President Donald Trump recently met with Russian President Vladimir Putin, Ukrainian President Volodymyr Zelensky, and several European leaders. However, no definitive outcomes emerged, leaving questions around the timing of talks and the scope of security guarantees for Ukraine unresolved.
Both Russia and Ukraine blamed each other for delays in the peace process, while continuing military operations. On Thursday, Russia launched a major air strike on Ukraine after Kyiv reported striking an oil refinery. The ongoing conflict also raises the prospect of tighter U.S. sanctions on Russian crude, with Trump having proposed 50% tariffs on Indian imports of Russian oil.
U.S. Demand Strengthens, Markets Eye Jackson Hole
U.S. demand signals have further buoyed oil prices this week. Alongside the notable inventory draw, August purchasing managers index (PMI) data showed improvements in manufacturing and services, indicating sustained economic activity.
Market attention now turns to Powell’s address at the Jackson Hole Symposium for guidance on interest rates and the broader economic outlook. Expectations for a September Fed rate cut have eased, providing some pressure on crude this week as the dollar strengthened.
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