Oil prices rose 1% on Thursday, breaking a five-day losing streak, amid signs of sustained demand in the US, the world's largest oil consumer, but uncertainty over the macroeconomic consequences of the introduction of US tariffs limited the rise, UNN reports with reference to Reuters.
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Brent crude futures rose 62 cents, or 0.9%, to $67.51 a barrel by 03:42 GMT (06:42 Kyiv time), while US West Texas Intermediate crude was $65.03 a barrel, up 68 cents, or 1.1%.
On Wednesday, both benchmark grades fell in price by approximately 1%, reaching an eight-week low, after US President Donald Trump announced progress in negotiations with Moscow.
Trump could meet with the Kremlin leader Vladimir Putin as early as next week, a White House official said on Wednesday, although the US continues to prepare for additional sanctions, including possibly against China, to pressure Moscow to end the war in Ukraine.
Russia is the world's second largest oil producer after the US.
Nevertheless, oil markets received support from a larger-than-expected drawdown in US oil inventories last week. The US Energy Information Administration reported on Wednesday that US oil inventories fell by 3 million barrels to 423.7 million barrels in the week ending August 1, exceeding analysts' expectations.
Inventories fell amid rising US oil exports and increased refinery utilization, with utilization on the Gulf Coast, the country's largest refining region, and on the West Coast reaching a high since 2023.
JP Morgan analysts note that global oil demand as of August 5 averaged 104.7 million barrels per day, which corresponds to an annual increase of 300,000 barrels per day, but is 90,000 barrels per day lower than their monthly forecast.
"Despite a somewhat weaker-than-expected start to the month, high-frequency oil demand indicators suggest that global oil consumption is likely to grow consistently in the coming weeks," analysts note, with jet fuel and petrochemical feedstocks expected to be the drivers of consumption growth.
However, global macroeconomic uncertainty following the introduction of new US tariffs on Indian goods limited price growth.
On Wednesday, Trump imposed an additional 25% tariff on Indian goods, citing its import of oil from Russia. The new import duty will take effect 21 days after August 7.
"While these new tariffs (for India from the US) are due to take effect in three weeks, markets are already pricing in their impact on trade flows, emerging market demand, and energy diplomacy in general," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Trump also said he could announce additional tariffs on China, similar to the 25% tariffs previously announced for India in connection with its purchases of Russian oil.
"Tariffs are likely to harm the global economy, which will ultimately affect fuel demand," said Sachdeva of Phillip Nova, adding that markets are ignoring the fact that their impact on the US economy and inflation will be much stronger.