Oil prices dipped modestly in Asian trading on Friday, as investors exercised caution ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium, where markets hope for clues on U.S. monetary policy.
Despite the minor pullback, crude was heading for a positive weekly performance, driven by renewed concerns over stalled peace negotiations between Russia and Ukraine, which could exacerbate supply risks.
Crude Supported by U.S. Demand
Stronger-than-expected U.S. demand provided additional support to oil. Data released earlier this week showed a draw of 6 million barrels from U.S. crude inventories in the week to August 15, surpassing market expectations. August PMI data for manufacturing and services also indicated that U.S. business activity remained healthy, reinforcing demand outlooks.
As of 21:20 ET (01:20 GMT), Brent futures were down 0.2% at $67.51 a barrel, while West Texas Intermediate (WTI) futures slipped 0.3% to $62.95 a barrel.
Weekly Recovery Fueled by Geopolitical Uncertainty
Over the week, Brent and WTI futures have climbed between 1.5% and 3%, recovering losses from earlier sessions. Crude initially fell as U.S.-led efforts to broker a Russia-Ukraine peace deal gained attention, but markets are now increasingly skeptical that a resolution will occur in the near term.
President Donald Trump recently held meetings with Russian President Vladimir Putin, Ukrainian President Volodymyr Zelensky, and several European leaders. Yet, no concrete progress was reported, leaving questions over the timing of negotiations and the nature of security guarantees unresolved.
Both Russia and Ukraine continue to blame each other for delays, while military operations persist. On Thursday, Russia launched a significant air strike after Kyiv reported hitting an oil refinery. The ongoing conflict also keeps the possibility of stricter U.S. sanctions on Russian crude on the table, with Trump proposing 50% tariffs on Indian imports of Russian oil.
Markets Await Jackson Hole Guidance
Investors are closely watching Powell’s Jackson Hole address for insights on interest rates and the U.S. economic trajectory. Expectations for a September rate cut have eased, exerting downward pressure on oil prices this week, particularly as the dollar strengthened in response to the changing outlook.
Spotlight metals and energy markets remain sensitive to both geopolitical tensions and U.S. economic data, leaving oil prices in a delicate balance between safe-haven support and rate-driven pressures.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.