Oil prices fall as market weighs end of US summer season and India's supply problems
Kyiv • UNN
Oil prices fell due to investors' assessment of demand prospects in the US and possible changes in supply. This is due to the US imposing strict tariffs on India over the import of Russian oil.
Oil prices fell on Thursday as investors assessed the outlook for fuel demand in the US ahead of the end of the summer season, as well as potential changes in oil supply due to the US imposing harsh tariffs on India over its import of Russian oil, UNN reports with reference to Reuters.
Details
Brent crude futures fell 31 cents, or 0.46%, to $67.74 at 00:27 GMT (03:27 Kyiv time), while West Texas Intermediate (WTI) crude futures fell 36 cents, or 0.56%, to $63.79.
Both contracts rose in the previous session after the US Energy Information Administration reported that US crude inventories fell by 2.4 million barrels in the week ended August 22, compared with analysts' expectations in a Reuters poll for a 1.9 million barrel decline.
"Oil prices are down this morning as traders re-evaluate yesterday's gains driven by the EIA report," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"While US crude inventories showed another decline, the pace of the decline slowed compared to last week's sharper drop, which curbed bullish momentum," she added.
The decline signaled strong demand ahead of the upcoming long Labor Day weekend in the US. However, this typically marks the unofficial end of the summer driving season and the beginning of declining demand in the US, said IG market analyst Tony Sycamore.
Traders are watching how New Delhi will react to Washington's pressure to stop buying Russian oil after US President Donald Trump on Wednesday doubled tariffs on imports from India to 50%.
"India is expected to continue buying crude oil from Russia at least in the short term, which should limit the impact of new tariffs on global supplies," Sycamore said.
The market is also affected by increasing supply, as major producers have canceled some voluntary cuts, which has offset some related factors, including Russia and Ukraine intensifying attacks on each other's energy infrastructure, the publication writes.
The prospect of a US interest rate cut in the near term also supported the oil market, as it could potentially stimulate economic activity and oil demand.
New York Federal Reserve President John Williams said on Wednesday that rates would likely fall at some point, but policymakers would need to see future economic data before deciding whether it would be appropriate to cut them at the Fed's September 16-17 meeting.