Impending Trump/Putin Peace Meeting Fails To Prevent A 5% Weekly Slide For Oil

Analysts think a truce wouldn't sway the market overly:? File Image/Pixabay

Anticipation of a meeting soon in Alaska between U.S. president Donald Trump and Russian president Vladimir Putin resulted in minuscule gains for oil on Friday, but not nearly enough to ward off a weekly drop of about 5 percent.

Brent settled up 16 cents at $66.59 per barrel but fell 4.4 percent for the week; West Texas Intermediate remained unchanged at $63.88 but fell 5.1 percent lower for the week.

Bob McNally, founder of the Rapidan Energy Group and a former White House official, said https://finance.yahoo.com/news/oil-heads-worst-run-since-060145861.html  of the impending meeting between Washington and Moscow to end the latter's war against Ukraine, "A possible truce would be only modestly bearish for crude — assuming there is no lifting of EU and US sanctions against Russian energy — since the market does not currently price in much disruption risk."

According to people with knowledge of the matter, a proposed ceasefire deal would lock in Russia's occupation of territory seized during its invasion; Putin is demanding that Ukraine cede its eastern Donbas area, as well as Crimea, which his forces illegally annexed in 2014.

Also on Friday, Canada joined the United Kingdom and the European Union in lowering the price cap for Russian-origin crude oil to $47.60 per barrel, down nearly $13 from the previous $60 per barrel.

A statement from Canada's department of finance explained, "The lower price cap will weaken Russia's ability to fund its illegal war and exert renewed pressure on Putin's military apparatus."

Neil Crosby, an energy market analyst at Sparta Commodities, summarized the drivers of Friday's oil trading: "Various non-oil considerations are at play, including fears over the impact of tariffs and the headlines flying over the last few days regarding a Trump and Putin meeting in the near term.

"Headline risk is particularly strong currently with flip-flopping regarding who will turn up to a meeting over Ukraine and under what circumstances."