Ammon News - Oil prices climbed on Thursday as investors remain cautious the U.S.-Russia summit on Ukraine on Friday will lead to a loosening of Russian crude sanctions and may even result in further action against buyers, while a weak market outlook capped gains.

Brent crude futures were up 24 cents, or 0.37%, at $65.87 a barrel at 0356 GMT, while U.S. West Texas Intermediate crude futures rose 21 cents, or 0.34%, to $62.85.

Both contracts hit their lowest in two months on Wednesday after bearish supply guidance from the U.S. government and the International Energy Agency (IEA).

Trump on Wednesday threatened "severe consequences" if Putin does not agree to peace in Ukraine. Trump did not specify what the consequences could be, but he has warned of economic sanctions if the meeting in Alaska on Friday proves fruitless.

Expectations the U.S. Federal Reserve will cut rates in September is also supportive for oil. Traders are almost 100% agreed a cut will happen after U.S. inflation increased at a moderate pace in July.

Oil prices were kept in check as crude inventories in the United States unexpectedly rose by 3 million barrels in the week ended on August 8, according to the U.S. Energy Information Administration on Wednesday. Reuters