Oil prices dipped in early European trading on Friday morning, ahead of US president Donald Trump's meeting with Russian president Vladimir Putin in Alaska later in the day, to discuss the war in Ukraine.
Brent crude (BZ=F) futures fell 0.6% to $66.44 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) declined 0.7% to $63.51 a barrel.
The talks are scheduled to take place at 8.30pm BST, so any developments would likely emerge after the US market close.
This will be the first time Trump and Putin have met one-on-one in six years, as the US president tries to broker an end to Russia's war in Ukraine.
Read more: Markets higher ahead of Trump-Putin summit in Alaska
There are hopes that talks could lead to a potential end to sanctions limiting supply of Russian oil to other markets.
In an interview with Fox News Radio on Thursday, Trump suggested that if the talks go well this could pave the way for a second meeting including Ukrainian president Volodymyr Zelensky, but also estimated that there was a 25% chance that the meeting would not be successful.
Jim Reid, global head of macro research and thematic strategy at Deutsche Bank (DBK.DE), said: “[Trump] described this potential follow-up as “very, very important”, indicating it could be the forum for striking a deal. Our [economist] Peter Sidorov notes that while an imminent breakthrough is unlikely, the summit will still be an important signpost for US-Russia relations and the war in Ukraine.”
Gold prices edged slightly higher on Friday morning, as investors remained cautious ahead of the Trump-Putin summit.
Gold futures (GC=F) rose 0.1% to $3,387.20 per ounce at the time of writing, while spot gold advanced 0.2% to $3,343.85 per ounce.
The precious metal is on course to end the week in the red, despite inflation data released on Thursday coming in hotter than expected. Gold is considered to act as a hedge against inflation, as when price growth erodes purchasing power, investors tend to look to the precious metal as a store of wealth.
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However, a higher-than-expected producer price index (PPI) reading on Thursday, dented investor hopes of a bigger 50-basis-point interest rate cut by the US Federal Reserve. Gold and interest rates tend to have an inverse relationship, as higher rates weaken the appeal of the precious metal as a non-yielding investment.
US PPI for July showed inflation for businesses rose 0.9% over the prior month, well ahead of the 0.2% increase that was forecast, data from the Bureau of Labor Statistics showed Thursday. On an annual basis, prices rose 3.3%, which was also ahead of the 2.5% expected.
