HOUSTON: Oil prices edged up by about 1 per cent on Wednesday as markets reacted to US President Donald Trump’s tighter deadline for Russia to end the war in Ukraine and his renewed threats of tariffs on countries trading in Russian oil.
Brent crude futures for September, set to expire on Thursday, gained 73 cents to close at $73.24 a barrel. The more actively traded October contract settled 79 cents higher at $72.47. US West Texas Intermediate (WTI) crude rose 79 cents to finish at $70 a barrel.
The gains came after both benchmarks briefly dipped nearly 1 per cent earlier in the day, as traders weighed geopolitical concerns against mixed signals from US economic and inventory data.
On Tuesday, Trump shortened his previously announced 50-day deadline for Russia to make progress on ending the Ukraine war, saying he now expects movement within 10 to 12 days. If not, he warned of new secondary sanctions, including 100 per cent tariffs on any country continuing to trade with Russia.
He also announced a 25 per cent tariff on Indian goods starting August 1, citing India’s defence and energy ties with Moscow. China, Russia’s top oil customer, was warned of similar measures if it did not scale back purchases.
Analysts at JP Morgan noted that while Beijing is unlikely to change course, New Delhi has shown signs it may comply, potentially affecting up to 2.3 million barrels per day of Russian oil exports. “India’s potential shift is being viewed as bullish for prices,” said Dennis Kissler of BOK Financial.
In the US, government data showed crude oil stockpiles rose by 7.7 million barrels last week, bucking expectations of a drawdown. Petrol inventories fell by 2.7 million barrels, much more than forecast, while distillate stocks rose by 3.6 million barrels, well above projections.
Economic data painted a mixed picture. While headline GDP growth came in stronger than expected in the second quarter, much of the rebound was due to lower imports rather than rising domestic demand, which expanded at its slowest pace in two and a half years.
The US Federal Reserve, meanwhile, kept interest rates unchanged in a split vote. Chairman Jerome Powell said it was too early to say whether rates could be cut at the next policy meeting in September, despite market expectations for easing.