Oil prices moved higher on Wednesday, supported by a larger-than-expected decline in U.S. crude inventories and concerns over the impact of fresh U.S. tariffs on India.
Brent crude futures rose 43 cents, or 0.6%, to $67.65 per barrel by 10:58 a.m. ET (1458 GMT). U.S. West Texas Intermediate (WTI) crude gained 50 cents, or 0.8%, to $63.77. Both benchmarks had dropped more than 2% in the previous session.
According to the Energy Information Administration (EIA), U.S. crude stockpiles fell by 2.4 million barrels last week to 418.3 million barrels, compared with analyst expectations of a 1.9-million-barrel draw in a Reuters poll. Gasoline inventories declined by 1.2 million barrels, short of the 2.2 million-barrel draw forecast. Distillate inventories, which include diesel and heating oil, dropped by 1.8 million barrels, contrasting with predictions for an increase of 885,000 barrels.
Phil Flynn, senior analyst at Price Futures Group, said gasoline demand signals stronger travel activity ahead of the Labor Day holiday. He noted this period marks the peak of the summer driving season and the last major use of the summer gasoline blend.
Market attention also turned to President Donald Trump’s decision to double tariffs on Indian imports, raising some duties as high as 50%. The move, a response to India’s purchases of Russian oil, took effect on Wednesday. While India’s Finance Ministry acknowledged that the immediate effect may be limited, its July economic review highlighted potential ripple effects on growth.
Geopolitical tensions added to market concerns. Russia intensified drone strikes on Ukraine’s energy and gas infrastructure across six regions overnight, while Ukraine launched counterattacks on Russian oil refineries and export facilities.
Meanwhile, U.S. envoy Steve Witkoff confirmed ongoing talks with both Ukrainian officials and Russia in a bid to ease the conflict. At the same time, Russia revised its crude export plan from western ports upward by 200,000 barrels per day in August following recent refinery attacks, according to people familiar with the matter.
