Crude oil prices steadied on Wednesday after an earlier decline as market sentiment was tempered by reports of an impending meeting between former U.S. President Donald Trump and Russian President Vladimir Putin, alongside a larger-than-expected draw in U.S. inventories.
Brent crude oil, against which Nigerian crude oil is measured, held firm at $82.60 per barrel after falling to an intraday low of $81.45 while West Texas Intermediate (WTI) traded around $78.90.
Both benchmarks had declined more than 1% on Tuesday amid renewed concerns over global demand and fragile geopolitical alignments.
The Kremlin confirmed on Wednesday that discussions are underway for a potential meeting between Trump and Putin “in the coming days,” marking what could be a significant geopolitical development with potential implications for global energy markets.
While the scope and agenda of the meeting remain undisclosed, traders are cautiously monitoring diplomatic overtures for any signals of de-escalation in Eastern Europe or adjustments in energy sanctions.
“The market is reacting to speculation, not confirmation,” said one London-based commodities strategist. “A face-to-face meeting between Trump and Putin, even informal, could introduce new dynamics into oil trade expectations and geopolitical risk pricing.”
Meanwhile, data from the American Petroleum Institute (API) showed U.S. crude inventories fell by 5.2 million barrels in the week ending August 2, surpassing analyst forecasts of a 3.3 million-barrel draw.
The Energy Information Administration (EIA) is expected to confirm similar figures on Thursday, which could support short-term bullish momentum if confirmed.
The unexpected inventory decline reflects robust U.S. refinery activity and increased domestic consumption, even as broader macroeconomic uncertainty and high interest rates continue to pressure demand forecasts in Asia and Europe.
Analysts note that while crude prices remain range-bound, volatility could increase as markets factor in potential diplomatic shifts, Middle East supply risks, and U.S. strategic reserve policy decisions ahead of the 2025 U.S. presidential election cycle.
“Until we see concrete policy changes or diplomatic outcomes, oil is likely to trade sideways,” said a senior energy analyst at Standard Chartered. “But a Trump–Putin meeting would be too large an event for markets to ignore, particularly if it touches on energy sanctions or regional conflicts.”
In the derivatives market, traders have reduced bullish positions slightly, indicating short-term caution. Brent’s six-month spread narrowed to $3.45 per barrel, down from $3.78 last week.
Oil markets are also weighing signals from OPEC+ producers, who have thus far maintained voluntary production cuts. Saudi Arabia’s energy ministry reiterated its commitment to market stability this week, stating that supply adjustments will be reviewed monthly.
With geopolitical headlines and demand data diverging, investors are recalibrating expectations. The Trump–Putin development could emerge as a key catalyst for crude in the near term, depending on how it intersects with ongoing sanctions, global supply chains, and diplomatic risk premiums.
As of Wednesday’s close, market sentiment remains neutral, with price action guided by a complex mix of geopolitical speculation, inventory trends, and cautious optimism ahead of potential policy shifts.