Crude oil prices edged higher today following a sharp dip to two-month lows, reflecting renewed risk premiums tied to upcoming geopolitical events and the Federal Reserve’s anticipated rate cuts.

Brent crude rose by 28 cents to $65.91 per barrel, while U.S. benchmark West Texas Intermediate gained 23 cents to $62.89 a barrel.

The rally comes ahead of a high-stakes meeting between U.S. President Donald Trump and Russian President Vladimir Putin set to address the ongoing Ukraine conflict.

Markets are pricing in uncertainty around the summit, especially Trump’s warning of “severe consequences” and potential sanctions if negotiations falter. This has added a notable geopolitical premium to crude prices.

However, gains are being tempered by indicators of oversupply: U.S. crude inventories rose unexpectedly by three million barrels, while the International Energy Agency projects strong output growth through 2025–26 due to OPEC+ expansions and rising non-OPEC production.

Further supporting oil prices are growing expectations that the U.S. Federal Reserve will implement interest rate cuts in September.

Market participants are nearly unanimous in anticipating at least a quarter-point decrease, which would lower borrowing costs and boost demand for risk assets like crude.Coupled with a softer U.S. dollar, this expectation has helped underpin the recent rebound.

At the same time, global supply dynamics are shifting. OPEC+ is preparing to increase output in September, and non-OPEC producers particularly in Latin America and Europe are also dialing up production.

This increase contributes to a market structure shift, with backwardation easing and term premiums narrowing as global inventories swell.

Investors remain watchful of two key upcoming events: the Trump-Putin meeting, which could reshape perceptions of Russian oil flow, and U.S. crude inventory figures, which provide insights into real-time demand.

Further clarity on the Fed’s policy trajectory is also anticipated, with implications for dollar strength and global energy demand.

In summary, today’s modest rebound in crude oil prices reflects a tension between geopolitical risk and shifting supply-demand fundamentals.

While the meeting in Alaska and central bank signals have buoyed sentiment, strong production and high inventory levels indicate that significant price moves may depend on geopolitical developments and policy signals in the weeks ahead.