WASHINGTON (dpa-AFX) - Crude oil lost early gains on Wednesday with a US envoy in Russia sending positive signals after negotiations on a ceasefire with Ukraine. Russia faces a threat of US sanctions on its oil exports after August 8 if it fails to reach a deal to end its war with Ukraine.
Today, WTI Crude Oil for September delivery was last seen trading down by $0.96 (or 1.47%) at $64.20 per barrel.
US President Donald Trump recently threatened Russia to stop its war with Ukraine or face severe sanctions and added that countries buying oil from Russia would also face high 'secondary sanctions.' He set August 8 as a deadline date.
Today, Trump announced an extra 25% tariff on India as a 'penalty' for the continued import of Russian crude oil, taking the total duties on import of Indian goods into the US to 50%. This 'penalty tariff' will take effect in 21 days.
Data released by the US EIA in its Petroleum Status Report revealed that for the week ending August 1, the crude oil inventories in the US fell by 3.029 million barrels; gasoline stocks fell by 1.323 million barrels; and net crude imports fell by 794,000 barrels per day.
Data released by API on Tuesday revealed that US crude oil inventories fell by 4.2 million barrels for the week ending August 1.
Moreover, distillate fuel production decreased to 104,000 barrels; distillate stocks decreased to 565,000 barrels; and gasoline production decreased to 239,000 barrels
OPEC+ will complete the unwinding of its largest voluntary production cut next month after the member-nations agreed this weekend to boost output by 547,000 barrels per day in September. The group had agreed for a rollback of the 2.2 million bpd cuts. The group is attempting to capitalize on peak summer demand which will come to an end in September.
Reportedly, oil demand in Asia is not as strong as it is supposed to be due to the ongoing trade war with the US. Chinese refiners are increasing their stockpiles in order to lower imports.
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