Oil prices settle higher as investors focus on Trump-Zelenskiy meeting

By Nicole Jao

NEW YORK (Reuters) -Oil prices settled 1% higher on Monday after talks between U.S. President Donald Trump and his Ukrainian counterpart in the wake of an inconclusive U.S.-Russia summit in Alaska on Friday.

Brent crude futures settled 75 cents, or 1.14%, higher at $66.60 a barrel. U.S. West Texas Intermediate crude gained about 62 cents, or 0.99%, to $63.42.

Last week, Brent eased by 1.1% while WTI dropped 1.7%.

Trump and Ukrainian President Volodymyr Zelenskiy met on Monday at the White House to discuss a path to ending Russia's war in Ukraine. 

Speaking to reporters in the Oval Office with Zelenskiy seated beside him, Trump expressed hope that Monday's summit could eventually lead to a trilateral meeting with Russian President Vladimir Putin, adding that he believes Putin wants the war to end.

Trump told Ukraine on Monday to give up hopes of getting back annexed Crimea or joining NATO, emerging more aligned with Moscow on seeking a peace deal instead of a ceasefire first after his meeting with Putin on Friday.

"I don't try to speculate on the outcome," said UBS analyst Giovanni Staunovo. "Now the market's focus is whether a date for the trilateral meeting will be announced."

The Alaska summit ended with no agreement to resolve or pause the war, though Trump emerged from talks more aligned with Moscow on seeking a peace deal rather than a ceasefire first.

Ukraine on Monday stepped up attacks on Russia's energy infrastructure. Its drones struck an oil pumping station in Russia's Tambov region, leading to the suspension of supplies via the Druzhba pipeline, providing some support to oil prices.

Meanwhile, White House trade adviser Peter Navarro said India's purchases of Russian crude were funding the war in Ukraine and had to stop, reviving 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.

Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, 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."

Investors are also watching for clues on U.S. interest rates from Federal Reserve Chairman Jerome Powell's comments at this week's Jackson Hole meeting.

Elsewhere, Hamas agreed to a 60-day ceasefire proposal with Israel that includes the release of half the hostages held in Gaza and Israel's release of some Palestinian prisoners, an Egyptian official source said on Monday.

(Reporting by Nicole Jao in New York, Seher Dareen and Robert Harvey in London, Florence Tan in Singapore and Sam Li in Beijing; Editing by David Goodman, Christina Fincher and Matthew Lewis)