Oil Prices Maintain Gains Amid Geopolitical Risks and Fed Rate Cut Speculation

• Oil steady in Asia; Brent at $67.77, WTI at $63.72 after weekly gains.

• Trump proposes Russia-Ukraine summit; US adds 25% tariff on Indian goods from Aug 27.

• Powell signals a rate cut with 87% chance in September, boosting oil demand expectations.

Oil prices held largely steady in Asian trading on Monday following notable weekly gains, supported by diminishing expectations of an immediate ceasefire in the Russia-Ukraine conflict and dovish cues from the U.S. Federal Reserve hinting at a possible rate cut next month. 

As of 21:20 ET (01:20 GMT), Brent crude futures for October delivery inched up 0.1% to $67.77 per barrel ,while West Texas Intermediate (WTI) crude futures also increased 0.1% at $63.72 per barrel. Last week, Brent crude surged nearly 3%, with WTI registering robust gains as well.

U.S. President Donald Trump recently proposed holding a trilateral summit including Russia and Ukraine to help mediate peace discussions. Ukrainian President Volodymyr Zelenskiy welcomed the initiative, seeing it as a positive step toward resolving the conflict. Although Trump noted that Russian President Vladimir Putin might be “tired” of the war, the outcome of talks remains uncertain.

Initial hopes for a ceasefire raised concerns about a potential oversupply of oil globally, especially if sanctions on Russian oil imports are eased. However, optimism has cooled, and oil prices remain supported amid the geopolitical uncertainty.

In related trade news, the U.S. plans to impose an additional 25% tariff on Indian goods from August 27, bringing the total to 50%, in response to India’s rising Russian oil imports. Indian officials have criticized the tariffs, and some oil refiners in India intend to continue sourcing Russian crude, sustaining demand that could underpin global oil prices.

Federal Reserve Chair Jerome Powell’s recent remarks at the Jackson Hole symposium have shifted market sentiment toward anticipating a rate cut in September. Powell highlighted mounting risks in the labor market, fueling expectations that the Fed may ease monetary policy soon.

Current trader data suggests an 87% probability of a 25-basis-point rate reduction at the upcoming Federal Reserve meeting. Lower interest rates typically decrease borrowing costs, encouraging investment and consumer spending, which in turn can lead to higher energy usage and support oil demand.