West Texas Intermediate (WTI) crude oil prices edged higher in early Asian trading on Thursday, climbing back above the $64.00 mark after a five-day losing streak. The rebound is supported by a larger-than-expected drawdown in US crude inventories and speculation about possible talks between the US and Russia amid escalating geopolitical tensions.
As of writing, WTI is trading around $64.10, showing signs of recovery driven by a combination of supply-side tightening and diplomatic developments that could ease market concerns.
US Inventory Data Lifts Sentiment
The latest report from the US Energy Information Administration (EIA) revealed a sharp drop in crude oil stockpiles. For the week ending August 1, US crude inventories fell by 3.029 million barrels, sharply beating market expectations of a 1.1 million-barrel decline. This follows a surprise build of 7.698 million barrels in the previous week, reinforcing the view that underlying demand remains strong.
The inventory data has helped stabilize WTI prices after recent losses triggered by fears of a global economic slowdown due to US-led tariff actions.
Geopolitics in Focus: Tariffs and Potential Talks
Markets are also reacting to fresh geopolitical developments. On Wednesday, US President Donald Trump announced a doubling of tariffs on Indian goods, citing India’s continued purchases of Russian energy. The new tariffs will come into effect 21 days after August 7. Trump also warned that similar 25% tariffs could be imposed on Chinese imports, escalating concerns over global trade tensions.
Adding to the geopolitical narrative, a White House official revealed that President Trump may soon meet Russian President Vladimir Putin, possibly as early as next week. Trump also expressed optimism about a three-way summit involving Ukrainian President Volodymyr Zelenskiy. These potential high-level discussions around the Ukraine conflict have eased fears of supply disruptions in the oil market, although they may also limit immediate upside for crude prices.
Market Outlook
With supply risks slightly tempered by diplomatic developments, and inventory data offering short-term support, traders are now closely watching the geopolitical landscape. While the inventory drop provides bullish momentum, concerns around tariffs and global demand may cap any sharp gains in the near term.
Looking ahead, further clarity on US-Russia and US-China relations—as well as any updates on peace efforts in Ukraine—will be key drivers for oil prices in the coming sessions.
