Crude oil prices fall to $67.53 as U.S. fuel demand outlook, India supply shifts weigh

Oil prices edged lower on Thursday as traders evaluated U.S. fuel demand prospects with the summer driving season winding down, while also considering possible changes in crude supplies as India comes under heavy U.S. tariffs for purchasing Russian oil.

Brent crude futures slipped 52 cents, or 0.67 percent, to $67.53 at 4:09 GMT, while West Texas Intermediate (WTI) futures fell 51 cents, or 0.80 percent, to $63.64, after gaining more than 1 percent in the prior session.

U.S. crude demand grows as summer driving season nears end

Oil prices dropped after the U.S. Energy Information Administration said on Wednesday that U.S. crude stockpiles declined by 2.4 million barrels in the week ending August 22, exceeding forecasts for a 1.9 million-barrel drop. While the drop was smaller than the sharp 6.01 million-barrel decline a week earlier, it still highlighted tightening supplies. The report also revealed that U.S. crude demand rose to 9.24 million barrels per day, up from 8.84 million in the previous week.

The decline pointed to solid demand ahead of the upcoming Labor Day holiday weekend, which traditionally marks the close of the summer driving season and the beginning of weaker fuel consumption in the U.S.

Analysts added that technical charts show crude encountering resistance around $64–$65, with support levels seen near $60.

Potential India supply shifts to impact market

Traders are closely monitoring New Delhi’s response to U.S. pressure to halt purchases of Russian oil, after President Donald Trump on Wednesday doubled tariffs on Indian imports to as high as 50 percent. India is likely to maintain its purchases of Russian crude in the near term, a move that should cushion global supply from the full impact of the new tariffs.

Although India is likely to stick to its energy strategy and continue sourcing oil from Moscow, the tariffs could put pressure on bilateral relations and add complexity to global demand trends.

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Rate cut prospects support oil prices

Supporting this week’s oil price gains, Russia and Ukraine have intensified strikes on each other’s energy facilities. Ukrainian officials said on Wednesday that Russia carried out a large-scale overnight drone assault on energy and gas transport sites across six regions, cutting power to more than 100,000 people.

Looking forward, traders remain cautious, with supply shifts and trade tensions fueling near-term volatility. However, oil prices continue to draw support from expectations of a U.S. interest rate cut next month, which could stimulate economic activity and fuel demand.

New York Federal Reserve President John Williams said Wednesday that while rates are likely to come down eventually, policymakers will await upcoming economic data before deciding on a potential move at the Fed’s September 16–17 meeting.

Following Fed Chair Jerome Powell’s comments at Jackson Hole, markets are now pricing in an 87.2 percent chance of a 25-basis-point cut in September, according to the CME FedWatch Tool. Cheaper borrowing costs could boost economic activity and, in turn, strengthen oil demand and support prices.