Economy
Crude Oil Climbs 2% Ahead of Trump-Putin Meeting
By Adedapo Adesanya
Crude oil was up by about 2 per cent on Thursday as the market look forward to the outcome of a meeting between US President Donald Trump and Russian President Vladimir Putin on Friday on ending the war in Ukraine.
Brent futures rose by $1.21 or 1.8 per cent to $66.84 a barrel and the US West Texas Intermediate (WTI) futures increased by $1.31 or 2.1 per cent to $63.96 per barrel.
Ahead of their meeting, Mr Trump warned of “severe consequences” if his talks with his Russian counterpart on Ukraine fail.
On Thursday, the American hinted President Putin was ready to make a deal on ending his war in Ukraine after floating the prospect of a on the eve of their summit in Alaska.
He has warned of economic sanctions if the meeting on Friday proves fruitless. Earlier on Wednesday, President Trump threatened “severe consequences” if the Russian leader does not agree to peace in Ukraine, without elaborating.
In addition, the US President had threatened to enact secondary tariffs on buyers of Russian crude, primarily China and India, if Russia continues its war in Ukraine.
Expectations that the US Federal Reserve will cut rates in September also propped up oil prices. Traders mostly believe a cut will happen next month after US consumer prices increased at a moderate pace in July.
US Treasury Secretary Scott Bessent called on the Federal Reserve to cut interest rates. He told Bloomberg that the benchmark should be at least 1.5 per cent lower than its current level of 4.25 per cent to 4.5 per cent.
President Trump has also repeatedly called for lower rates, but economists are increasingly worried that US inflation is gathering pace, driven by high tariffs, and that high rates are needed to cool it down.
There are signals that the market believes supply would be plentiful as soon as peak summer travel season ends as seen from reports by the International Energy Agency (IEA) and the Organisation of the Petroleum Exporting Countries (OPEC).
Reuters reported that the rise in supply from OPEC+ producers, as well as from Latin America and Europe, has eased the backwardation in the oil market in recent weeks.
