Oil Prices Edge Up on U.S. Demand Signals, Ukraine War Uncertainty
Global oil prices rose slightly on Thursday, supported by stronger demand indicators in the United States and lingering uncertainty surrounding the conflict in Ukraine.
Brent crude futures on Thursday afternoon gained 11 cents, or about 0.2%, to trade at $66.95 a barrel after touching a two-week high earlier in the session. U.S. West Texas Intermediate (WTI) crude climbed 6 cents to $67.77. Both benchmarks had advanced by more than 1% in the previous day’s trading.
Market sentiment was also shaped by geopolitical developments. Russia on Wednesday dismissed Western-led negotiations on Ukraine’s security concerns, saying efforts that exclude Moscow amounted to a “road to nowhere.”
Independent analyst Gaurav Sharma noted that any breakthrough in peace talks could weigh on crude markets. “If the White House’s efforts do result in a halt to hostilities in Ukraine, and Russia gradually coming back into the international fold, it will be bearish for the crude market,” he said. “But for now, the Brent price floor to watch out for remains at $65 a barrel.”
Meanwhile, tensions between Washington and New Delhi added another layer of complexity. U.S. President Donald Trump announced a new 25% tariff on Indian goods effective August 27, citing India’s continued reliance on discounted Russian oil, which accounts for around 35% of its crude imports. Despite this, Russian embassy officials in New Delhi said Moscow intends to maintain its oil supply to India.
The possibility of fresh sanctions on Russia has also kept traders cautious. “Given uncertainty over progress towards ending the war, the possibility of tighter sanctions on Russia has resurfaced, which has led to bullish sentiment among traders,” Reuters quoted Tamas Varga of PVM Oil Associates as saying.
In the U.S., government data showed a sharper-than-expected decline in crude inventories, a factor that lent additional support to prices. The Energy Information Administration (EIA) reported a draw of 6 million barrels last week, reducing stockpiles to 420.7 million barrels. Analysts surveyed by Reuters had forecast a smaller 1.8-million-barrel decline.
Despite the headline drawdown, Ashley Kelty of Panmure Liberum cautioned that the picture for demand may not be as strong as it seems.
He said, “While the large draw indicates increased demand, the rise in crude levels at Cushing suggests underlying demand may be softer and that the draw was higher in part due to higher refinery runs and increased exports.”
Attention also turned to the U.S. Federal Reserve’s Jackson Hole symposium, which began Thursday. Investors are awaiting signals on potential monetary policy easing. Fed Chair Jerome Powell is set to speak Friday at 10 a.m. ET (1400 GMT), a speech that could influence broader market sentiment, including commodities.
