By Seher Dareen
LONDON (Reuters) -Oil prices held steady on Monday as traders awaited clues from a meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy as they attempt to come to a peace deal to end Europe’s deadliest war in 80 years.
Brent crude futures stood at $65.87 a barrel at 0847 GMT, while U.S. West Texas Intermediate crude was up 9 cents, or 0.14%, to $62.89 a barrel.
Trump met Russian President Vladimir Putin in Alaska on Saturday and emerged more aligned with Moscow on seeking a peace deal instead of a ceasefire first.
“Market focus now shifts to today’s Washington meeting for signs of a deal that could eventually boost crude and gas supply. Meanwhile, in the week to August 12, speculators held the first-ever combined net short position in WTI (CME & ICE), leaving prices exposed to any upside surprises,” said Saxo Bank’s head of commodity strategy, Ole Hansen.
“I don’t believe the oil market has priced in a full peace dividend that potentially could see prices of crude and EU gas suffer further setbacks,” Hansen added.
White House trade adviser Peter Navarro’s comments around India’s purchases of Russian crude funding Moscow’s war in Ukraine led to crude ticking up earlier in the session.
“India acts as a global clearinghouse for Russian oil, converting embargoed crude into high-value exports while giving Moscow the dollars it needs,” Navarro said.
“The U.S. adviser’s sharp words on India’s Russian crude imports, paired with postponed trade talks, revive concerns that energy flows remain hostage to trade and diplomatic frictions, even as peace prospects in Ukraine brighten,” said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
On Saturday, Trump said he did not immediately need to consider retaliatory tariffs on countries such as China for buying Russian oil but might have to “in two or three weeks”, cooling initial concerns about a disruption in Russian supply.
China, the world’s biggest 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 path of U.S. interest rate cuts that could boost stocks to further records.
(Reporting by Seher Dareen in London, Florence Tan in Singapore and Sam Li in Beijing. Editing by Emelia Sithole-Matarise and Mark Potter)
