WASHINGTON (dpa-AFX) - Crude oil jumped on Thursday ahead of a crucial meeting between the US and Russian presidents tomorrow in Alaska to discuss ways to end the Russia-Ukraine war. Today's rise halts a two-day decline by oil prices.
WTI Crude Oil for September delivery was last seen trading up by $1.32 (or 2.11%) at $63.97 per barrel.
US President Donald Trump and Russian President Vladimir Putin are set to meet tomorrow in Alaska to discuss ending the ongoing three-plus-year war between Russia and Ukraine.
Trump had earlier served an ultimatum to Russia to stop the war in 10-12 days or face severe sanctions and also warned that countries buying oil from Russia would be tariffed higher. He even imposed 25% 'penalty' tariffs on India, a major purchaser of oil from Russia.
In 2023, Russia's crude petroleum exports were valued at $122 billion, with China ($60.7B) and India ($48.6B) as the primary destinations.
Though the deadline expired last Friday, Russia has been unmindful of America's threat.
Yesterday, Trump warned Putin of severe consequences if the war continues even after tomorrow's summit. In addition, the US Treasury Secretary had stated that if the meeting does not go well, India may be slapped with further tariffs.
In the US, the inflation and jobs data released today has kept rate cut expectations alive, although traders feel the cut may not be as large as previously hoped.
With crude oil being a dollar-denominated commodity, Fed rate cuts could impact dollar value and consequently oil prices.
Wednesday's monthly report from International Energy Agency indicated that global crude runs will approach an all-time high of 85.6 million barrels per day in August, with annual growth of 1.6 million bpd in the third quarter.
OPEC+ member nations have already agreed to increase output for the month of September.
Peak oil demand for the Northern Hemisphere is closing down, reducing diesel margins.
Traders feel that by the year-end, demand will slow and supply may overwhelm the oil market.
As things stand, the bilateral US-Russia meeting tomorrow is considered very crucial for global oil trade as the outcome could send prices up or down.
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