NEW YORK: Oil prices edged up on Thursday as Russia and Ukraine blamed each other for a stalled peace process, and as earlier US data showed signs of strong demand in the top oil consuming nation.
Brent crude futures were up 56 cents, or about 0.8%, at $67.40 a barrel at 12:08 p.m. EDT (1608 GMT), having hit a two-week high earlier in the session. US West Texas Intermediate crude futures were up 53 cents, or 0.9%, at $63.24 a barrel. Both contracts climbed over 1% in the prior session.
The path to peace in Ukraine remained uncertain, turning oil traders cautious after a selloff over the past two weeks on hopes that US President Donald Trump would soon negotiate a diplomatic end to Russia’s war with its neighbor.
Both Moscow and Kyiv have since blamed each other for stalling the peace process. Russia on Thursday launched a major air attack near Ukraine’s border with the European Union, while Ukraine claimed to have hit a Russian oil refinery.
“Some geopolitical risk premium is slowly being pumped back into the market,” oil trading advisory firm Ritterbusch and Associates told clients on Thursday.
The uncertainty in the peace talks means that the possibility of tighter sanctions on Russia has resurfaced, said Tamas Varga, an analyst at PVM Oil Associates.
Oil prices were also supported by a larger-than-expected drawdown from US crude stockpiles in the last week, indicating strong demand.
US crude stockpiles fell 6 million barrels in the week ended August 15, the US Energy Information Administration reported on Wednesday, while analysts had expected a draw of 1.8 million barrels.
Investors were also looking to the Jackson Hole economic conference in Wyoming for signals on a possible Fed interest rate cut next month. The annual gathering of central bankers begins on Thursday, with Fed Chair Jerome Powell scheduled to speak on Friday.
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