Crude Oil Prices See Weekly Surge on Positive Demand
Crude oil prices posted modest weekly gains by Friday as strong US economic growth and expectations of a Federal Reserve rate cut offset pressure from new US tariffs on Indian imports and worries over slowing demand.
Brent crude traded at $67.64 per barrel on Friday, up around 0.5% from last week’s close of $67.32. Similarly, the American benchmark West Texas Intermediate (WTI) stood at $64.08 per barrel, up roughly 0.6% from $63.66 last Friday.
Prices climbed early in the week after Ukrainian drone strikes hit Russian energy sites, sparking a fire at the Kursk Nuclear Power Plant and damaging the Ust-Luga export terminal in the Baltic Sea. The attacks reignited supply security concerns.
Oil prices further gained after US President Donald Trump renewed his threat to impose sanctions on Russia if there is no progress towards a peace deal with Ukraine, adding to geopolitical and supply-related concerns.
However, the market faced downward pressure later in the week as Trump’s decision to impose steep tariffs on Indian imports took effect. The new measures, which doubled duties from 25% to 50%, targeted New Delhi’s continued purchases of Russian oil and raised fears of slowing trade and weaker global demand. Trump had signed the executive order on Aug. 6.
Investors are closely monitoring how India responds to Washington’s pressure and the potential implications for global oil supply and demand. Moreover, the US Energy Information Administration (EIA) reported that commercial crude oil inventories fell by 2.4 million barrels last week, while gasoline stocks declined by about 1.2 million barrels.
Although the drawdowns highlighted strong demand during the summer travel season, concerns that consumption may weaken as the season ends, along with investor caution over future demand risks, exerted downward pressure on prices.
Despite these headwinds, oil found support later in the week from strong US economic growth. The economy expanded at an annualized rate of 3.3% in the second quarter, surpassing the preliminary estimate of 3%, reinforcing expectations for sustained demand in the world’s largest oil consumer.
While market sentiment was supported throughout the week by expectations of a September rate cut from the US Federal Reserve, traders are now pricing in an 85% probability of a 25-basis-point reduction in September, with another cut possible by year-end. Lower borrowing costs are expected to stimulate economic growth and, in turn, support fuel demand in the world’s largest oil consumer. Oando Slips, Trades at 47% Discount to 52-Week High
