Oil prices held steady on Monday (August 18th) as traders awaited clues from the meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy in their efforts to reach a peace deal to end Europe's deadliest war in 80 years.

Brent crude was at $65.87 a barrel at 08:47 GMT, while U.S. West Texas Intermediate crude rose 9 cents, or 0.14%, to $62.89 a barrel.

Trump met with Russian President Vladimir Putin in Alaska on Saturday and appeared more aligned with Moscow in seeking a peace deal, rather than a ceasefire first.

"Market focus now turns to today's Washington meeting for signs of a deal that could ultimately increase crude oil and gas supplies. Meanwhile, in the week to August 12, speculators held their first-ever combined net short position in WTI (CME & ICE), leaving prices vulnerable to an upside surprise," said Ole Hansen, head of commodity strategy at Saxo Bank.

"I'm not convinced the oil market has priced in the full peace dividend, which could potentially cause EU crude and gas prices to decline further," Hansen added. Comments by White House trade adviser Peter Navarro about India's purchases of Russian crude, which are funding Moscow's war in Ukraine, caused crude prices to rally early in the session.

"India acts as a global clearinghouse for Russian oil, converting embargoed crude into high-value exports while providing Moscow with much-needed dollars," Navarro said. "The US adviser's sharp remarks about India's imports of Russian crude, coupled with the delay in trade talks, have reignited concerns that energy flows are still hampered by trade and diplomatic tensions, even as prospects for peace in Ukraine brighten," said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.

On Saturday, Trump said he wouldn't immediately consider retaliatory tariffs against countries like China for buying Russian oil, but might do so "in two or three weeks," allaying initial concerns about disruptions to Russian supplies. China, the world's largest oil importer, is the largest buyer of Russian oil, followed by India.

Investors are also watching for clues from Federal Reserve Chairman Jerome Powell's comments at this week's Jackson Hole meeting regarding the direction of US interest rate cuts, which could push stocks to record highs. (alg)

Source: Reuters