Geopolitical risks have returned to oil prices as talks between Russia and Ukraine stalled, while the U.S. sent ships to encircle Venezuela.
USOIL – Daily Chart
The price of USOIL has slipped again recently, with a move toward $60.00. The latest gains have a chance to retake the $64.00 level for further gains.
Oil prices have steadied again as traders await further clarification on Russia and Ukraine.
“Everyone is waiting for President Trump’s next step,” said UBS commodity analyst Giovanni Staunovo. “Over the coming days, it seems nothing will happen”.
The latest comments from U.S. President Donald Trump have related to a potential meeting between Russian President Vladimir Putin and Ukraine’s President in the coming weeks. The negotiations are moving as quickly as some traders had expected.
The 3-1/2-year war continued this week as Russia launched an attack near Ukraine’s border with the European Union, and Ukraine said it hit a Russian oil refinery.
The less likely a ceasefire appears to happen, the more likely there will be tougher U.S. sanctions on Russia, according to ING analysts. Oil prices were also boosted by a larger-than-expected reduction in U.S. crude stockpiles over the last week.
Crude stocks fell by 6 million barrels to August 15, the U.S. Energy Information Administration said. Analysts had expected to see a drawdown of 1.8 million barrels.
Meanwhile, the U.S. appeared to be picking another fight after Trump ordered its military to encircle Venezuela. The U.S. said the move was to target drug cartels, but the country has close ties with China, and the country has shared its support for Venezuela.
“China opposes any move that violates the purposes and principles of the UN Charter and a country’s sovereignty and security. We oppose the use or threat of force in international relations and the interference of external forces in Venezuela’s internal affairs under any pretext,” a spokesman said.
