Oil prices tracked lower on Thursday as new US tariffs on India fueled trade concerns and expectations of weaker fuel demand with the end of the summer driving season. Brent crude was trading at $66.94 per barrel, down 0.33% from the previous close of $67.16. US benchmark West Texas Intermediate fell 0.25% to $63.48 from $63.64 in the prior session.
US President Donald Trump’s decision to raise tariffs on Indian goods to 50% took effect on Wednesday. Markets are also watching how New Delhi will respond to US pressure to curb Russian oil imports, with analysts predicting that India will likely continue to buy Russian crude in the short term.
US commercial crude oil inventories fell by 0.6% in the week ending Aug. 22, dropping about 2.4 million barrels to 418.3 million barrels, the Energy Information Administration said late Wednesday. That was above forecasts for a 1.7 million-barrel decline. Also, gasoline inventories slipped by 1.2 million barrels to 222.3 million. While the drawdown underscored strong summer demand, analysts warned that consumption is likely to ease as the travel season winds down.
Investor caution over future demand kept pressure on prices. Meanwhile, expectations that the Federal Reserve will cut interest rates in September lent support, with analysts saying lower borrowing costs could spur economic growth and boost fuel demand. US commercial crude oil inventories decreased by 0.6% during the week ending Aug. 22, according to data released by the Energy Information Administration (EIA) late Wednesday. Inventories fell by around 2.4 million barrels to 418.3 million barrels, above the forecasted fall of 1.7 million barrels. Strategic petroleum reserves, which are excluded from commercial crude stocks, increased by 800,000 barrels to 404.2 million barrels, the data revealed.
Over the same period, gasoline inventories decreased by approximately 1.2 million barrels to 222.3 million barrels. EIA data showed that US crude oil production increased by 57,000 barrels per day (bpd) to about 13.44 million bpd during the week ending Aug. 22. US crude oil imports fell by 263,000 bpd to approximately 6.23 million bpd, while exports declined by 562,000 bpd to around 3.81 million bpd over the same period. In the Short-Term Energy Outlook (STEO) released on August 12, the EIA projected that crude oil output in the country would average 13.41 million bpd in 2025.
Oil prices Trended down amidst demand concerns
