Oil prices gained ground during Thursday’s Asian session, ending a three-day losing streak after U.S. government data revealed a steeper-than-expected decline in crude inventories. The drop points to tightening supply, but traders remained on edge as the possibility of new U.S. trade tariffs loomed.
As of 21:35 ET (01:35 GMT), Brent crude futures for September delivery were up 0.6% at $68.94 a barrel, while West Texas Intermediate (WTI) crude rose 0.8% to $66.92 per barrel.
The rise followed a stretch earlier in the week when crude fell nearly 4% across three sessions. The losses came in response to U.S. President Donald Trump delaying immediate sanctions on Russia, instead giving a 50-day ultimatum for resolving the war in Ukraine.
EIA: Crude Inventories Post Large Drawdown
The Energy Information Administration (EIA) reported on Wednesday that U.S. crude oil inventories dropped by 3.9 million barrels to 422.2 million barrels in the week ending July 11. That figure outpaced analyst expectations for a 1.8 million-barrel decline, suggesting a tighter domestic market.
Refining activity remained elevated, with U.S. refiners operating at 93.9% of total capacity. Despite the draw in crude, gasoline stocks increased by 3.4 million barrels and distillate inventories rose by 4.2 million barrels.
The combination of strong refinery output and higher import levels appears to have supported prices by tightening crude supply conditions.
Tariff Threats Keep Traders Cautious
Investor sentiment remained restrained amid rising concerns over potential U.S. trade actions. President Trump stated Wednesday he intends to inform over 150 countries about newly planned tariff rates, noting that most of the nations affected are smaller trading partners.
“All affected nations would face the same tariffs,” Trump said, emphasizing uniform treatment under his latest trade initiative.
This announcement follows his earlier pledge to hit European Union imports with a 30% tariff starting August 1. European leaders have condemned the move, warning that it could seriously disrupt global trade between two major economic powers.
Sources suggest the European Commission is preparing retaliatory measures involving tariffs on approximately $84.1 billion (€72 billion) worth of American exports should trade talks collapse.
Although there are early signals that U.S.-China trade tensions may be easing, the broader market remains wary. Investors fear that any escalation in tariffs could suppress oil consumption and weigh on global growth.
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