Oil Prices Rise as US-Ukraine Talks Temper Ceasefire Hopes

Highlights:

• WTI crude rose 1% to above US$63 and Brent gained over 1% to just under US$67 at the time of writing, after US-Ukraine talks dampened ceasefire hopes.
• Ukrainian President Volodymyr Zelensky stressed diplomacy with Russia, but signaled no quick resolution, keeping traders cautious.
• Despite the rebound, oil futures remain down 10% this year on worries over Trump’s trade policies and OPEC+ supply returns.

Market Update

Oil prices edged higher after a meeting between US President Donald Trump and Ukrainian President Volodymyr Zelensky signaled that a quick resolution to the ongoing conflict with Russia remains unlikely. At the time of writing, West Texas Intermediate (WTI) crude rose about 1% to settle above US$63 per barrel, while Brent crude climbed more than 1% to finish just under US$67 per barrel.

Impact of Diplomatic Signals

During discussions at the White House, Zelensky emphasized the importance of seeking diplomatic solutions to end the war but provided no indication of an imminent ceasefire. Market analysts noted that his comments have likely reduced already slim expectations for a rapid breakthrough, keeping traders cautious. Rebecca Babin, senior energy trader at CIBC Private Wealth Group, remarked that oil markets have been repeatedly swayed by alternating hopes of ceasefire agreements and fears of further sanctions. This pattern has limited risk appetite and kept crude trading in a tight range.

Market Outlook

Despite the short-term price uptick, oil futures remain down over 10% so far this year, pressured by concerns around Trump’s trade policies and OPEC+ plans to bring supply back online more quickly. The uncertainty around geopolitical developments, particularly the Ukraine conflict, continues to cloud the outlook for crude. Energy traders suggest that volatility will persist until there is more clarity on both diplomatic progress and supply-side decisions. For now, the market appears locked between geopolitical risks supporting prices and broader economic concerns weighing them down.

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