Oil prices fell on Thursday, retreating from gains in the previous session as investors weighed expectations of slowing U.S. fuel demand with the end of the summer driving season approaching, while also awaiting India’s response to new U.S. tariffs.
Brent crude futures slipped 50 cents, or 0.73%, to $67.55 by 06:43 GMT, while West Texas Intermediate (WTI) fell 51 cents, or 0.80%, to $63.64.
Both benchmarks had risen on Wednesday after the U.S. Energy Information Administration (EIA) reported that crude inventories fell by 2.4 million barrels for the week ending August 22, outpacing forecasts of a 1.9-million-barrel draw. However, analysts noted the decline was slower than the sharper drop recorded the previous week.
“Oil prices are pulling back as traders reassess yesterday’s rally sparked by the EIA report,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “While inventories continue to fall, the pace has slowed, tempering bullish sentiment.”
The upcoming Labor Day holiday typically signals the peak of summer demand, after which fuel consumption in the U.S. tapers off. “This marks the unofficial end of the driving season and the start of lower demand,” said IG analyst Tony Sycamore.
Markets are also closely watching India’s reaction after President Donald Trump doubled tariffs on Indian imports to 50% in response to New Delhi’s continued purchases of Russian oil. Sycamore added that India is still expected to import Russian crude in the near term, limiting the impact of the tariffs on global supply.
On the supply side, rising output from major producers — many of whom have eased voluntary cuts — has pressured prices, offsetting concerns over geopolitical risks. Russia and Ukraine have both stepped up attacks on energy infrastructure, with Russia launching drone strikes on six Ukrainian regions this week, leaving more than 100,000 people without power.
Meanwhile, hopes of a U.S. interest rate cut provided some support to oil markets. New York Fed President John Williams said on Wednesday that rates will likely be lowered at some point, but policymakers will await fresh data before deciding at the Fed’s September 16–17 meeting.
