HOUSTON: Oil prices rose on Thursday on investors’ expectations for the Federal Reserve to cut interest rates, while stalled Ukraine peace talks tempered expectations of a deal restoring Russian oil flows.
Brent crude rose 81 cents, or 1.3percent, to USD63.48 at 11:50 a.m. EDT (1651 GMT), while US West Texas Intermediate rose 94 cents, or 1.6percent, to USD59.89.
US crude futures briefly rose more than USD1 a barrel earlier in the session as global shares rose, powered by expectations that a US rate cut will support the world’s largest economy and oil demand, after data showed employment is slowing.
Meanwhile, the dollar was lower and poised for its tenth straight day of losses against a basket of major currencies, making crude cheaper for buyers using other currencies and in turn, potentially boosting demand.
“I think the potential for a rate cut is overshadowing everything right now and driving crude prices up,” said Phil Flynn, senior analyst with Price Futures Group.
UKRAINE PEACE TALKS STALL
The perception that progress on a peace plan for Ukraine was stalling also supported prices, after US President Donald Trump’s representatives emerged from peace talks with the Kremlin with no specific breakthroughs on ending the war. “War and politics, balanced against comfortable stocks, expected supply surplus, and OPEC’s market-share strategy, keep Brent in the USD60–USD70 range for now,” said PVM analysts.
Previously, expectations of an end to the war had pressured prices lower, as traders anticipated a deal would allow Russian oil back into an already oversupplied global market.
Ukraine hit the Druzhba oil pipeline in Russia’s central Tambov region, a Ukrainian military intelligence source said on Wednesday, the fifth attack on the pipeline that sends Russian oil to Hungary and Slovakia. The pipeline operator and Hungary’s oil and gas company later said supplies were moving through the pipeline as normal.
“Ukraine’s drone campaign against Russian refining infrastructure has shifted into a more sustained and strategically coordinated phase,” consultancy Kpler said in a research report.
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