Oil Prices Edge Higher on U.S. Demand Signals and Ukraine War Uncertainty
Oil prices inched up on Thursday, supported by signs of strong U.S. demand and lingering uncertainty around efforts to end the war in Ukraine.
Brent crude futures rose 11 cents, or 0.2%, to $66.95 a barrel by 13:35 GMT after hitting a two-week high earlier in the day. U.S. West Texas Intermediate (WTI) gained 6 cents to trade at $67.77. Both benchmarks gained more than 1% in the previous session.
Geopolitical tensions remained a key driver after Russia dismissed attempts to resolve Ukraine-related security concerns without its involvement as a “road to nowhere.” Independent energy analyst Gaurav Sharma noted that any breakthrough in peace talks could weigh on oil markets, but added: “For now, the Brent price floor to watch out for remains at $65 a barrel.”
The market also reacted to U.S. President Donald Trump’s decision to impose an additional 25% tariff on Indian goods starting August 27, citing New Delhi’s rising intake of Russian crude, which now accounts for around 35% of India’s total oil imports. Moscow, however, signaled its intention to continue supplies despite Washington’s warnings.
Analyst Tamas Varga of PVM Oil Associates said that the possibility of tighter sanctions on Russia has resurfaced, bolstering bullish sentiment among traders.
On the supply side, U.S. crude inventories fell sharply by 6 million barrels last week to 420.7 million barrels, according to data from the Energy Information Administration (EIA). The drawdown far exceeded analysts’ expectations of a 1.8 million-barrel decline.
While the larger-than-expected draw points to stronger demand, Ashley Kelty of Panmure Liberum cautioned that increased refinery runs and higher exports also contributed, and rising stockpiles at Cushing hinted at softer underlying demand.
Meanwhile, investors are awaiting policy signals from the U.S. Federal Reserve’s Jackson Hole symposium, where Chair Jerome Powell is expected to speak Friday at 14:00 GMT. Markets are watching closely for indications of a potential interest rate cut in September.
