Oil prices declined following their sharpest weekly drop since late June, ahead of a key meeting between US and Russian leaders scheduled for Friday. The talks have sparked hopes of a potential resolution to the Ukraine conflict and a resulting increase in oil supply. Brent crude hovered near $66 per barrel after a 4.4% fall last week, while West Texas Intermediate traded above $63. Although President Donald Trump had previously set an August 8 deadline for Russia to agree to a ceasefire, he did not announce new sanctions or energy-related tariffs during the summit announcement in Alaska.
Reports suggest the US and Russia are working on a deal that would formalize Moscow’s hold on captured Ukrainian territory, but approval from Ukraine and European allies remains uncertain. Westpac’s Robert Rennie noted that if a deal is eventually reached, Brent could dip below $65, with potential to fall under $60 later in the year. Meanwhile, Ukraine claimed a successful drone attack on a major Russian refinery. Market watchers await key supply-demand reports from OPEC, the EIA, and the IEA this week.
