Oil prices set for positive week; Jackson Hole ahead

Investing.com-- Oil prices edged higher Friday, heading for weekly gains ahead of cues on U.S. monetary policy from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium.

At 08:10 ET (12:10 GMT), Brent Oil Futures rose 0.1% to $67.69 a barrel and West Texas Intermediate crude futures climbed 0.2% to $63.62 a barrel. 

Oil heads for weekly gain as Russia-Ukraine peace appears distant 

Brent and WTI futures were trading up between 1.5% and 3% this week, after lrecouping losses made at the beginning of the week.

While oil prices had tumbled amid increased efforts by the U.S. to broker a Russia-Ukraine peace treaty over the past week, traders were seen growing increasingly convinced that a deal will not be signed in the near-term. 

Russia and Ukraine both blamed each other for stalling the peace process, while also keeping up military offensives against each other.

"It’s proving difficult to set up a Putin-Zelensky summit, while discussions around potential security guarantees face obstacles," said analysts at ING, in a note. "Russia suggests, for example, that it should be part of any security guarantees for Ukraine. Not helping matters is Russia launching its largest strike on Ukraine in over a month. The less likely a ceasefire looks, the more likely the risk of tougher sanctions."

President Trump’s trade advisor, Peter Navarro, said he expects that secondary tariffs on India for its purchases of Russian oil to go ahead next week.

"While Indian refiners initially took a step back from buying Russian crude when these tariffs were announced, reports are that attractive discounts have Indian refiners showing increased interest once again," said ING. "This poses upside risk for the oil market. If tariffs push India away from buying Russian oil, and Russia can’t divert this supply to other buyers, domestic producers would be forced to reduce supply."

Jackson Hole awaited 

Crude has also been helped this week amid optimism that demand in the U.S., the world’s biggest fuel consumer, remained robust.

U.S. inventories saw a much bigger than expected 6 million barrel draw in the week to August 15, data showed earlier this week.

Purchasing managers index data for August showed improvements in both manufacturing and services activity, indicating that business activity in the country remained robust. 

Focus is now squarely on Fed Chair Jerome Powell’s address at the Jackson Hole Symposium on Friday, for more cues on interest rates and the economy.

Waning expectations that the Fed will cut rates in September put some pressure on oil prices this week, especially as the dollar firmed. 

Ambar Warrick contribute to this article