Onome Amuge
Oil prices edged higher on Wednesday after US government data showed a larger-than-expected fall in crude inventories, while the Trump administration’s move to double tariffs on Indian imports raised concerns over global trade flows.
Brent crude, the international benchmark, rose 55 cents, or 0.8 per cent, to $67.77 a barrel. West Texas Intermediate, the US marker, added 62 cents, or one per cent, to $63.86. Both contracts had dropped more than 2 per cent in the previous session.
The US Energy Information Administration reported that crude stocks fell by 2.4 million barrels to 418.3 million last week, surpassing analysts’ forecasts for a 1.9 million-barrel draw.
“The gasoline demand number is supportive and shows people are getting ready to travel over the Labor Day weekend,” said Phil Flynn, senior analyst at Price Futures Group.
The demand signal came as traders also weighed the geopolitical backdrop. President Trump’s administration on Wednesday doubled tariffs on Indian imports to as much as 50 per cent, citing New Delhi’s continued purchases of Russian crude. India’s finance ministry acknowledged in a monthly review that while the immediate impact of the tariffs on exports would be limited, the broader economic ripple effects could pose challenges.
Supply security in eastern Europe remained another area of concern. Russia overnight launched drone attacks on energy and gas infrastructure across six Ukrainian regions, Ukrainian officials said, while Kyiv has struck Russian oil refineries and export facilities in recent days. Moscow has nonetheless raised its planned August crude exports from western ports by 200,000 barrels per day, according to people familiar with the matter.
Meanwhile, US special envoy Steve Witkoff said in New York on Tuesday that Washington was holding talks with both Russia and Ukraine in an attempt to ease the conflict, though traders remain wary of further disruption to regional energy flows.
Beyond supply and geopolitical factors, broader macroeconomic signals also shaped sentiment. New York Federal Reserve Bank president John Williams said on Wednesday that interest rates would likely fall at some point, but policymakers needed to see further data before deciding whether to cut at the September 16–17 meeting. A potential easing of borrowing costs could boost economic growth and energy demand.
Oil markets remain volatile as traders balance immediate US demand signals with global trade tensions and the risks of supply disruption from the Russia-Ukraine conflict. Analysts expect the combination of tighter inventories, geopolitical uncertainty and shifting monetary policy expectations to keep crude prices on edge heading into September.
