Oil prices edged lower in early European trading on Tuesday amid renewed diplomatic efforts aimed at ending the war in Ukraine, raising hopes that sanctions on Russian crude exports could be lifted.
Brent (BZ=F) crude futures lost 0.7% to trade at $65.09 per barrel at the time of writing, while West Texas Intermediate (CL=F) futures retreated by 1% to $62.82 a barrel.
It comes after US president Donald Trump’s meeting at the White House on Monday with his Ukrainian counterpart Volodymyr Zelensky and a group of European allies. In a subsequent social media post, Trump said he had spoken with Russian president Vladimir Putin and was working to arrange a summit between Putin and Zelensky, to be followed by a meeting of all three leaders.
Read more: FTSE 100 LIVE: Stocks rise and oil falls as Trump pushes for Zelensky-Putin meeting
“An outcome which would see a ratcheting down of tensions and remove threats of secondary tariffs or sanctions would see oil drift lower toward our $58 per barrel Q4-25/Q1-26 average target,” said Bart Melek, head of commodity strategy at TD Securities.
Zelensky described his direct talks with Trump as “very good” and said the two had discussed Ukraine’s need for US security guarantees.
While Trump has called for a swift resolution to the conflict, concerns remain in Kyiv and among its allies that he may press for a deal on terms that are favourable to Moscow.
“Oil prices are largely responding to outcomes of recent meetings between Trump-Putin and Trump-Zelensky and while no outright peace deal or ceasefire seems imminent, there has been some progress made and chances of further escalation or intensification of sanctions on Russia from US or Europe may be off the table for now,” said Suvro Sarkar, lead energy analyst at DBS Bank.
Gold prices were mixed on Tuesday morning as investors weighed geopolitical developments surrounding Trump’s meeting with Ukrainian and European leaders, while turning their attention to the US Federal Reserve’s annual Jackson Hole symposium later this week.
At the time of writing, gold futures rose 0.2% to $3,383.30 per ounce, while spot gold slipped 0.3% to $3,340.63 per ounce.
“There was not much reaction in gold to the Putin-Trump meeting. I think we'll continue in this price range. The next inflection point is the Federal Reserve [conference],” said Marex analyst Edward Meir.
Investors are now focused on Fed chair Jay Powell’s upcoming remarks at the Jackson Hole symposium from 21 to 23 August, which could provide clearer direction on monetary policy heading into the final quarter of the year. Markets have largely priced in a 25 basis-point interest rate cut, though Meir noted there remains “an outside chance of a 50 basis point reduction,” a move that could send gold prices higher.
