The oil market was down by 1 per cent on Friday as traders awaited the outcome of talks between US President Donald Trump and Russian leader Vladimir Putin.
Brent crude futures lost 99 cents or 1.5 per cent to trade at $65.85 per barrel and the US West Texas Intermediate (WTI) crude futures eased by $1.16 or 1.8 per cent to $62.80 per barrel and for the week, WTI dropped 1.7 per cent, while Brent eased by 1.1 per cent.
The market had anticipated that the meeting could lead to an easing of the sanctions imposed on Moscow over the war in Ukraine.
However, President Trump described the meeting as “productive,” but acknowledged the day’s progress had fallen short of achieving a ceasefire.
“There’s no deal until there’s a deal,” President Trump said. “We didn’t get there, but we have a very good chance of getting there.”
President Putin described the talks as “constructive,” and emphasized that “root causes” of the conflict must be resolved.
The two leaders emerged after the three-on-three meeting, in which President Trump was joined by Secretary of State Marco Rubio and special envoy Steve Witkoff to deliver joint statements.
President Putin also appeared to look ahead to the next stage of talks which he hinted that will hold next time in Moscow, the Russian capital.
Since the markets had closed for the week, there was no immediate impact on trading.
Now, the market will be looking forward to President Trump’s next line of action as he had threatened to impose secondary sanctions on countries that buy Russian oil if there is no progress with peace talks.
Market analysts noted that President Trump will likely threaten further tariff pressure on India and possibly China, who are main buyers of Russian oil.
Weaker economic data from China also raised concerns over fuel demand after data showed factory output growth slumped to an eight-month low and retail sales growth expanded at its slowest pace since December.
This weighing on sentiment despite stronger oil throughput (volume of crude oil refined into finished products) in the world’s second-largest crude consumer and largest importer.
Reuters reported that throughput at Chinese refineries rose 8.9 per cent year-on-year in July, but that was down from June levels, which were the highest since September 2023. Despite the increase, China’s oil product exports last month were also up from a year ago, suggesting lower domestic fuel demand.
Forecasts of growing oil market surplus also weighed on sentiment, as did the prospect of US interest rates not getting anticipated cuts anytime soon.