- WTI price falls amid weakening US fuel demand as the summer driving season draws to a close.
- Traders watched for India’s response to US pressure to cut Russian Oil imports following the tariff increases.
- Oil prices may regain ground as the Russia-Ukraine attacks on energy infrastructure.
West Texas Intermediate (WTI) Oil price retraces its recent gains from the previous session, trading around $63.40 per barrel during the Asian hours on Thursday. Crude Oil prices eased as investors weighed weakening United States (US) fuel demand with the approach of the end of the summer driving season.
The US Energy Information Administration (EIA) released Crude Oil Stocks Change, indicating stockpiles fell by 2.39 million barrels in the previous week, against the expected 2.0 million barrels decline. The larger-than-expected drawdown pointed to solid demand ahead of the US Labor Day long weekend.
However, IG market analyst Tony Sycamore, cited by Reuters, noted that the holiday typically marks the unofficial end of the summer driving season and the beginning of weaker US demand. Sycamore also added that traders monitored India’s response to US pressure to curb Russian Oil imports after tariff hikes. However, analysts expect India to keep buying in the near term, limiting the global impact. US President Donald Trump on Wednesday doubled tariffs on Indian imports, raising them to as high as 50%.
The downside of the Oil prices could be restrained by intensified Russia-Ukraine attacks on energy infrastructure. Russia launched a massive drone attack on energy and gas transport infrastructure across six Ukrainian regions overnight.
Oil prices may regain their ground amid prevailing dovish sentiment surrounding the Federal Reserve (Fed) policy outlook. It is worth noting that lower borrowing costs would potentially boost economic activity and Oil demand.
New York Fed President John Williams said on Wednesday that interest rates will likely come down at some point, but policymakers will need to review upcoming economic data before deciding for September.
