Oil Rises 1% On Stalled Russia-Ukraine Peace Talks, Strong US Demand

• Oil prices rose by nearly a dollar a barrel on Thursday as Russia and Ukraine blamed each other for a stalled peace process, and as earlier U.S. data showed signs of strong demand in the top oil-consuming nation.
• Brent crude futures were up 85 cents, or about 1.3%, at $67.69 a barrel, having hit a two-week high earlier in the session. U.S. West Texas Intermediate crude futures were up 86 cents, or 1.4%, at $63.57 a barrel.
• The path to peace in Ukraine remained uncertain, turning oil traders cautious after a selloff over the past two weeks on hopes that U.S. President Donald Trump would soon negotiate a diplomatic end to Russia's war with its neighbour.
• Both Moscow and Kyiv have since blamed each other for stalling the peace process. Russia on Thursday launched a major air attack near Ukraine's border with the European Union, while Ukraine claimed to have hit a Russian oil refinery.
• The uncertainty in the peace talks means that the possibility of tighter sanctions on Russia has resurfaced, said Tamas Varga, an analyst at PVM Oil Associates. Oil prices were also supported by a larger-than-expected drawdown from U.S. crude stockpiles in the last week, indicating strong demand.
• U.S. crude stockpiles fell 6 million barrels in the week ended August 15, the U.S. Energy Information Administration reported on Wednesday, while analysts had expected a draw of 1.8 million barrels. Investors were also looking to the Jackson Hole economic conference in Wyoming for signals on a possible Fed interest rate cut next month.

(Source: Reuters)