Oil prices saw a slight increase on Thursday, supported by larger-than-expected declines in crude oil and fuel inventories in the United States, the world’s largest oil consumer.
Brent crude futures rose by 13 cents or 0.19% to $66.97 a barrel at 0055GMT, following a 1.6% gain in the previous session. Meanwhile, US West Texas Intermediate (WTI) crude futures increased by 15cents or 0.24% after climbing 1.4% on Wednesday.
According to the US Energy Information Administration (EIA), US crude oil inventories fell by 6million barrels last week, totaling 420.7million barrels. This decline surpassed analysts’ expectations of a 1.8million barrel draw.
Gasoline stocks also decreased by 2.7million barrels, significantly more than the anticipated 915,000 barrel drop, reflecting steady driving demand during the summer travel season.
Additionally, the four-week average for jet fuel consumption reached its highest level since 2019.
“Crude oil prices rebounded as signs of strong demands in the US boosted sentiment”, noted senior commodity strategist at ANZ, Daniel Hynes.
However, Hynes cautioned that bearish sentiments persists as traders continue to monitor ongoing negotiations regarding Russia’s war in Ukraine. On Wednesday, Russia criticised efforts to address security issues related to Ukraine without its involvement , calling it a “road to nowhere”.
Meanwhile, US and European military planners are discussing post conflict security guarantees for Ukraine.
The prolonged peace negotiations have led to continued Western sanctions on Russian oil supplies, with the threat of additional US sanction and tariff looming over the market.
Despite, these challenges Russia has reiterated its commitment to supplying crude oil sales to India, despite warnings from the US regarding Russian crude purchases.
US President Donald Trump announced a 25% tariff on Indian goods starting August 27 due to their dealings with Russian oil. The European Union has also imposed sanctions on Indian private refiner Nayara Energy, which is backed by the Russian oil company Rosneft.
While Indian refiners initially reduced their Russian oil purchases, state run Indian Oil and Bharat Petroleum have resumed buying crude for September and October delivery as discounts widened.
