Oil Prices Edge Higher as Ukraine Peace Efforts Falter, US Stocks Decline

Oil prices steadied on Friday, set to break a three-week losing streak after hopes for a swift peace deal between Russia and Ukraine weakened. Brent crude rose 0.12% to $67.75 per barrel, while WTI gained 0.25% to $63.68. Both benchmarks advanced more than 1% in the previous session, with Brent up 2.8% and WTI 1.4% for the week.

Geopolitical tensions escalated as Russia intensified strikes near the EU border and Ukraine targeted a Russian oil refinery and the Druzhba pipeline, halting flows to Hungary. Analysts noted that the lack of progress on ceasefire talks increases the risk of tougher U.S. sanctions on Russia.

Prices were also buoyed by a larger-than-expected 6 million barrel drawdown in U.S. crude stocks, signaling strong demand, against expectations of a 1.8 million barrel decline.

However, weak economic data from Germany, showing a 0.3% contraction in Q2, weighed on the outlook for oil demand. Investors now await signals from the Jackson Hole conference, where Fed Chair Jerome Powell may hint at a potential U.S. interest rate cut that could boost global growth and oil consumption.