(Bloomberg) — Oil rose as much as 1.2%, reversing some of Tuesday’s decline, as tightening crude, gasoline and diesel inventories overshadowed the start of a higher US tariff on Indian goods.
West Texas Intermediate traded near $64 a barrel, with prices locked in a $5 band this month. A US government report showed that crude inventories fell by 2.4 million barrels, more than expected, while declining fuel supplies suggest demand remains robust despite tariffs weighing on longer-term consumption expectations.
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The bullish data belies a worsening global trade backdrop that has contributed to a 12% drop in US oil futures this year. The US on Wednesday raised its tariff on some Indian goods to 50% — the highest levy applied to any Asian nation — to punish the country for buying Moscow’s oil.
But Indian processors plan to maintain the bulk of their purchases, suggesting the trade limits won’t ease investor worries about a global supply surplus, Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. With OPEC+ unwinding ouput curbs, the International Energy Agency has warned of a record glut next year.
Trump, meanwhile, has lauded falling oil prices, saying Tuesday that crude futures would break $60 a barrel “pretty soon.”
–With assistance from Sherry Su, John Deane, Sarah Chen and Yongchang Chin.
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