Oil prices experienced a decline on Thursday as investors analyzed the future of U.S. fuel demand approaching the end of summer driving season, alongside considering possible crude supply fluctuations caused by India facing increased U.S. tariffs for importing Russian oil.
Brent crude futures decreased by 0.46% to $67.74, and West Texas Intermediate (WTI) crude futures dropped by 0.56% to $63.79 after a more than 1% increase in the previous session.
The U.S. Energy Information Administration's report revealed a 2.4 million barrel decrease in U.S. crude inventories for the week ending August 22, surpassing analysts' expectations of a 1.9-million-barrel draw in a Reuters poll. This drop indicated robust demand ahead of the upcoming U.S. Labor Day weekend, despite the approaching decline in U.S. fuel demand post-summer driving season.
Technical analyses suggest crude oil may face resistance between $64-$65 and could potentially test support near $60, according to IG market analyst Tony Sycamore. Traders are closely monitoring India's response to U.S. pressure to cease Russian oil imports, following President Donald Trump's decision to double tariffs on Indian imports to 50%.
Sycamore anticipates India will continue purchasing crude oil from Russia in the short term, minimizing the new tariffs' global supply impact. Additionally, escalating energy infrastructure attacks between Russia and Ukraine have contributed to recent oil price gains.
The likelihood of a U.S. interest rate cut in the near future has further supported the oil market, as it could potentially stimulate economic activity and oil demand. New York Federal Reserve Bank President John Williams hinted at possible rate decreases, emphasizing the need to evaluate upcoming economic data before the Fed's September meeting.
Overall, the oil market remains influenced by a variety of factors, including demand expectations, geopolitical tensions, and monetary policy decisions, highlighting the importance of staying informed on current developments.
