(Investing) – LONDON -Oil prices edged up on Thursday, bolstered by signs of strong demand in the United States, with uncertainty over efforts to end the war in Ukraine also lending support.
futures were up 11 cents, or around 0.2%, at $66.95 a barrel at 1335 GMT, having hit a two-week high earlier in the session. U.S. West Texas Intermediate was up 6 cents at $67.77.
Both contracts climbed over 1% in the prior session.
Russia said on Wednesday that attempts to resolve security issues relating to Ukraine without Moscow’s participation were a “road to nowhere.”
“If the White House’s efforts do result in a halt to hostilities in Ukraine, and Russia gradually coming back into the international fold, it will be bearish for the crude market,” said independent analyst Gaurav Sharma. “But for now, the Brent price floor to watch out for remains at $65 a barrel.”
U.S. President Donald Trump has announced an additional tariff of 25% on Indian goods from August 27 because of India’s Russian crude purchases, which make up nearly 35% of its overall oil imports.
Russian embassy officials in New Delhi said on Wednesday that Moscow expects to continue supplying oil to India despite U.S. warnings.
Given uncertainty over progress towards ending the war, the possibility of tighter sanctions on Russia has resurfaced, which has led to bullish sentiment among traders, said Tamas Varga, an analyst at PVM Oil Associates.
Meanwhile, inventories fell by 6 million barrels last week to 420.7 million barrels, the U.S. Energy Information Administration said on Wednesday, against expectations in a Reuters poll for a 1.8 million-barrel draw. [EIA/S]
While the large draw indicates increased demand, the rise in crude levels at Cushing suggests underlying demand may be softer and that the draw was higher in part due to higher refinery runs and increased exports, Panmure Liberum’s Ashley Kelty said.
Investors were also waiting for policy cues that would signal an interest rate cut in September from the Federal Reserve’s Jackson Hole symposium that begins on Thursday. Chair Jerome Powell is scheduled to speak on Friday at 10 a.m. ET (1400 GMT).
