LONDON: Oil prices rose on Monday after White House trade adviser Peter Navarro said India's purchases of Russian crude were funding Moscow's war in Ukraine and had to stop.
Traders were also watching for clues from a meeting later in the day between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy as they attempt to come to a peace deal to end Europe's deadliest war in 80 years.
Brent crude futures rose 0.46% or 30 cents to $66.15 a barrel by 1005 GMT, while U.S. West Texas Intermediate crude was up 38 cents, or 0.61%, to $63.18 a barrel.
White House trade adviser Peter Navarro's comments around India's purchases of Russian crude funding Moscow's war in Ukraine revived concerns about supply flows.
“India acts as a global clearinghouse for Russian oil, converting embargoed crude into high-value exports while giving Moscow the dollars it needs,“ Navarro said.
The statement had triggered some buying interest in the market, SEB analyst Ole Hvalbye said.
“The U.S. adviser’s sharp words on India’s Russian crude imports, paired with postponed trade talks, revive concerns that energy flows remain hostage to trade and diplomatic frictions, even as peace prospects in Ukraine brighten,“ said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
Later in the day, Trump will meet first with Zelenskiy at 1715 GMT and then with all the European leaders at 1900 GMT.
Trump told Ukraine on Monday to give up hopes of getting back annexed Crimea or joining NATO, as he emerged more aligned with Moscow on seeking a peace deal instead of a ceasefire first after his meeting with Russian President Vladimir Putin in Alaska on Friday.
“I don’t believe the oil market has priced in a full peace dividend that potentially could see prices of crude and EU gas suffer further setbacks,“ said Saxo Bank’s head of commodity strategy, Ole Hansen.
Speculators in the week to August 12 held the first-ever combined net short position in WTI (CME & ICE), leaving prices exposed to any upside surprises, Hansen added.
Investors are also watching for clues from Federal Reserve Chairman Jerome Powell's comments at this week's Jackson Hole meeting regarding the path of U.S. interest rate cuts that could boost stocks to further records - REUTERS
