WTI price recovers above $62.50 as traders brace for Trump-Zelenskiy meeting
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WTI price rebounds to around $62.55 in Tuesday’s early Asian session.
Trump said he had spoken to Putin to begin making plans for a summit with Ukraine’s Zelenskiy.
Reduced Fed rate cut expectations might cap the upside for the WTI price.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $62.55 during the early Asian trading hours on Tuesday. The WTI edges higher after talks between US President Donald Trump and his Ukrainian counterpart in the wake of an inconclusive US-Russia summit in Alaska on Friday. Traders await the release of the American Petroleum Institute (API) weekly Crude Oil Stock, which is due later on Tuesday.
On Monday, Trump and Ukrainian President Volodymyr Zelenskiy met at the White House to discuss a path to ending Russia's war in Ukraine. US President said that the US would "help out" Europe in providing security for Ukraine as part of any deal to end the war in Ukraine and expressed hope that Monday's summit could eventually lead to a trilateral meeting with Russian President Vladimir Putin.
Trump further stated that negotiations to obtain peace in the years-long war prompted by Russia’s invasion of Ukraine can take place while both countries are still fighting, dropping his earlier calls for a ceasefire. Meanwhile, Ukraine stepped up attacks on Russia's energy infrastructure. Its drones struck in Russia's Tambov region, leading to the suspension of supplies via the, per Reuters. This, in turn, provides some support to the WTI price.
On the other hand, traders pared bets on a rate cut at the US Federal Reserve (Fed) at the September 16-17 meeting after Producer Price Index (PPI) inflation was hotter than expected in July. This could provide some support to the US Dollar (USD) and undermine the USD-denominated commodity price. Fed fund futures traders are now pricing in an 83% chance of a September rate cut, after last week briefly fully pricing in a move, according to the CME FedWatch tool. Traders will closely monitor the Fed's Jackson Hole symposium later on Friday for rate clues.
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