Global crude oil prices are showing signs of recovery today, driven by fading expectations of a swift peace deal between Russia and Ukraine and data showing stronger-than-expected U.S. crude inventory draws. While volatility remains, the outlook is cautiously optimistic.
Brent crude, the global benchmark, edged lower at $67.55 per barrel, though traders are holding out for what could be a weekly gain of around 2.7 percent.
Meanwhile, U.S. West Texas Intermediate (WTI) slipped to $63.42 per barrel but is still on track for a weekly advance of about 1.1 percent. The market appears to be stabilizing as the recent slide in prices begins to reverse.
Earlier in the European trading session, there was a minor uptick in WTI pricing, reflecting renewed buying interest. Some analysts tied this to surging tensions and the low likelihood of meaningful progress in peace talks, especially after a planned summit failed to materialize.
Adding to the bullish sentiment was a surprise drawdown of six million barrels in U.S. crude inventories, indicating a tightening supply in the near term. This unexpected development helped underpin price gains and suggested stronger demand momentum.
Looking beyond the immediate price movements, broader market sentiment is being shaped by uncertainties over whether Federal Reserve policymakers at the upcoming Jackson Hole symposium will signal intentions for U.S. interest rate cuts. Those signals could have a ripple effect on global demand expectations and, by extension, oil markets.
The current price range Brent around $67.50 and WTI near $63 places crude firmly back on the path to regaining upside momentum after a demanding few weeks. While prospective rate cuts could boost global demand and further support prices, bearish forces like extended geopolitical disruption and supply-side decisions remain in play.
In summary, crude oil markets are rallying this week as geopolitical risks rise and inventories tighten. The near-term trajectory now hinges on whether inflation and monetary policy easing signal a recovery in global energy demand.
Written By Ian Maleve
