Oil prices edge up after five-day slump as US demand shows strength

SINGAPORE: Oil prices inched higher on Thursday, halting a five-day losing streak, as signs of solid demand in the United States helped lift market sentiment. The US is the world’s largest oil consumer, and fresh data showed crude stockpiles had dropped more than expected last week.

Brent crude rose by 20 cents to trade at $67.09 a barrel, while US West Texas Intermediate (WTI) gained 22 cents to reach $64.57.

The rebound followed a sharp drop on Wednesday when both benchmarks fell around 1 percent to hit their lowest levels in two months. The decline came after US President Donald Trump indicated progress in possible talks with Russia over the war in Ukraine.

A White House official said Trump could meet Russian President Vladimir Putin as early as next week. While that has eased some concerns over new sanctions disrupting Russian oil supply, the US is still preparing further measures, including potential secondary sanctions on countries like China, to pressure Moscow into ending its military campaign.

Russia remains the world’s second-largest oil producer, just behind the US.

Despite the geopolitical uncertainty, oil prices found support from US inventory data. The Energy Information Administration reported that crude stockpiles fell by 3 million barrels to 423.7 million in the week ending August 1. That drop far exceeded analyst forecasts, which had expected a draw of about 591,000 barrels.

The decline in inventories was driven by a rise in US oil exports and increased activity at refineries. Utilisation rates on the Gulf and West Coasts, two key refining hubs, climbed to their highest levels since 2023. Even so, investors remain cautious.

“The situation is still very fluid,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment. “Talks between the US and Russia, new tariffs on oil buyers like India and China, and broader concerns about global trade are keeping markets on edge.”

He added that with OPEC+ planning to raise output, prices could struggle to break higher in the short term. “WTI is likely to stay between $60 and $70 for the rest of the month.”

In a move that could further complicate matters, Trump on Wednesday announced a fresh 25 percent tariff on Indian imports. The decision, linked to India’s continued purchases of Russian crude, is set to take effect 21 days after August 7.

The US President also warned that similar tariffs could be imposed on Chinese goods if Beijing doesn’t curb its oil trade with Moscow.