HG MARKETS:

Oil prices held steady in Asian trading on Monday, extending last week’s sharp gains. This stability was driven by two main factors: fading hopes for an immediate ceasefire between Russia and Ukraine, and signs from the U.S. Federal Reserve that a rate cut is likely coming next month. Brent crude futures for October rose slightly to $67.77 per barrel, while WTI crude futures also saw a small gain to $63.72 per barrel. Both benchmarks had surged last week.

Despite U.S. President Donald Trump’s proposal for a peace summit between Ukraine and Russia, initial optimism for a quick resolution has faded. This uncertainty is helping to keep oil prices from falling, as a peace deal could potentially lead to an oversupply of oil if U.S. sanctions on Russian crude are lifted.

In a new trade development, the U.S. will impose a 25% penalty tariff on Indian goods starting August 27, bringing the total tariff to 50%. This action is a direct response to India’s continued purchases of Russian oil. India has stated it will continue to prioritize its own interests, with some oil processors indicating they will maintain their Russian crude purchases, which should help sustain demand for oil globally.

Meanwhile, comments from Federal Reserve Chair Jerome Powell at the Jackson Hole symposium have influenced markets. Powell’s remarks hinted that the Fed might cut interest rates in September to address risks to the labor market. Markets are now placing an 87% chance on a quarter-point rate cut. Lower interest rates typically boost economic activity and, by extension, energy consumption, which is also supporting oil prices.