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Investing.com -- Oil prices edged higher Thursday, benefiting from signs of healthy U.S.demand, while traders assessed the potential impact on supply from U.S. tariffs as well as Ukraine peace talks.
At 08:30 ET (12:30 GMT), Brent oil futures for October rose 0.5% to $67.19 a barrel and West Texas Intermediate crude futures gained 0.5% to $64.66 a barrel.
Both benchmarks slid about 1% on Wednesday, touching their lowest in eight weeks.
U.S. crude stocks fall
Crude prices have pushed higher after the Energy Information Administration said on Wednesday that U.S. crude oil stockpiles fell by 3 million barrels in the week ended August 1, exceeding an expected decline of 591,000 barrels in a Reuters poll of analysts.
Indications that demand has remained solid in the U.S., the largest energy consumer in the world, has helped boost the market, particularly as the summer driving season comes close to an end.
Helping the tone was also the news that Saudi Arabia, the world’s biggest oil exporter, raised its September crude oil prices for Asian buyers, the second monthly rise in a row, on tight supply and robust demand.
Supply in focus over tariffs, Ukraine talks
Investors will also be keeping an idea on the global supply situation, after U.S. President Donald Trump signed an executive order raising his effective tariffs on India to a cumulative 50%, citing New Delhi’s continued purchasing of Russian oil.
The new levy will be effective 21 days after August 7, and ramps up pressure on the South Asian economy, which is also among the world’s biggest oil importers.
"It will be worth keeping an eye on the Middle East oil market to see if there’s increased buying interest from Indian refiners. This would confirm whether they are starting to diversify away from Russian supply," said analysts at ING, in a note.
"If India stops buying Russian oil and Russia is unable to divert supply to other buyers, it puts as much as 1.7m b/d of supply at risk."
Trump also raised the prospect of tariffs on China over its buying of Russian oil, with these tariffs aimed at further pressuring Moscow into ending its war against Ukraine.
"Friday is the deadline that Trump set for Russia to come to a peace deal with Ukraine. Failing to do so means the U.S. could announce further sanctions against Russia," said ING.
Tariffs on Russia’s biggest oil buyers could severely crimp global supplies in the coming months, especially if they seek oil supplies from other sources.
Oil nurses steep recent losses
Oil was still nursing steep losses over the past week, with traders remaining largely bearish on crude in the face of increased OPEC+ production, and creeping doubts over global demand.
The OPEC+ agreed to hike output sharply in September, further unwinding two years of production cuts despite sustained weakness in oil prices. Members of the cartel are now seeking to increase production to offset a loss of fiscal revenue from weak oil prices.
Crude prices also remained under pressure from sustained concerns over weakening demand, especially following a swathe of weak economic readings from the U.S. and China in recent weeks.
Ambar Warrick contributed to this article
Crude prices also benefited from some bargain buying after sinking to two-month lows on Wednesday, amid persistent concerns over higher OPEC+ production and worsening demand across the globe.