Crude oil climbs on strong U.S. demand, lack of progress in Russia-Ukraine peace talks

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Crude oil futures posted a second straight gain Thursday, building on the previous session's rise that followed the release of government data showing large draws in U.S. oil and gasoline stocks, as well as a lack of visible progress toward direct negotiations to end the Russia-Ukraine war.

The EIA reported U.S. crude stockpiles fell 6M barrels, gasoline inventories dropped by 2.7M barrels, and refinery utilization rose to 96.6% of capacity in the week ended August 15 - a bullish report [https://seekingalpha.com/news/4487715-crude-oil-posts-solid-gains-on-large-us-inventory-drawdown-russia-ukraine-talks] that indicates strong U.S. demand.

The U.S. inventory data "suggest that oil demand remains relatively strong," while geopolitical and trade issues keep traders cautious, Rania Gule of XS.com said in a note, but "any price increases are likely to be limited and temporary, as the market faces a medium-term risk of oversupply, making any long-term price support conditional on stronger global demand or lower production."

Crude futures had come under some pressure following President Trump's Friday summit with Russia's President Putin, but Russia has since said attempts by the U.S. and other Western governments to resolve Ukraine's security concerns without Russia's participation were a "road to nowhere."

Analysts say the growing uncertainty in the peace talks means that the possibility of tighter sanctions on Russia has resurfaced.

Investors also are awaiting Federal Reserve Chairman Powell's speech Friday at the Jackson Hole economic symposium for signals on a possible Fed interest rate cut next month.

Front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for October delivery finished +1.3% to $63.52/bbl, its best settlement in a week, and front-month Brent crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) for October delivery ended +1.2% to $67.67/bbl, the highest close since August 4.

U.S. natural gas futures snapped a three-day losing streak after the Energy Information Administration reported a smaller than usual inventory build that reduced the storage surplus over the five-year average; the front-month Nymex September natural gas (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) settled +2.7% to $2.826/MMBtu.

ETFs: (NYSEARCA:USO [https://seekingalpha.com/symbol/USO]), (BNO [https://seekingalpha.com/symbol/BNO]), (NYSEARCA:UCO [https://seekingalpha.com/symbol/UCO]), (SCO [https://seekingalpha.com/symbol/SCO]), (USL [https://seekingalpha.com/symbol/USL]), (DBO [https://seekingalpha.com/symbol/DBO]), (DRIP [https://seekingalpha.com/symbol/DRIP]), (GUSH [https://seekingalpha.com/symbol/GUSH]), (USOI [https://seekingalpha.com/symbol/USOI]), (UNG [https://seekingalpha.com/symbol/UNG]), (BOIL [https://seekingalpha.com/symbol/BOIL]), (KOLD [https://seekingalpha.com/symbol/KOLD]), (UNL [https://seekingalpha.com/symbol/UNL]), (FCG [https://seekingalpha.com/symbol/FCG]), (NYSEARCA:XLE [https://seekingalpha.com/symbol/XLE])

MORE ON CRUDE OIL

* WTI Oil Eyes A Bullish Bounce But Bearish Pressure Remains In Play [https://seekingalpha.com/article/4815403-wti-oil-eyes-bullish-bounce-but-bearish-pressure-remains-in-play]
* WTI Crude Holds Above $62 As Traders Weigh Peace Hopes And U.S. Stock Draws (Technical Analysis) [https://seekingalpha.com/article/4815211-wti-crude-holds-above-62-as-traders-weigh-peace-hopes-and-us-stock-draws]
* Commodities: Oil Lower On Prospects Of A Zelensky-Putin Meeting [https://seekingalpha.com/article/4814744-commodities-oil-lower-prospects-of-zelensky-putin-meeting]