Oil prices rebound from 5-week low on Trump threats on Russian crude buyers
Brent crude futures rose 29 cents, or 0.4%, to $67.93 a barrel by 0119 GMT while U.S. West Texas Intermediate crude was at $65.44 a barrel, up 28 cents, or 0.4%.
Both contracts fell by more than $1 on Tuesday to settle at their lowest in five weeks, marking a fourth session of losses, on oversupply concerns from OPEC+'s planned September output hike.
"Investors are assessing whether India will reduce its Russian crude purchases in response to Trump's threats, which could tighten supply, but it remains to be seen if that will actually happen," said Yuki Takashima, economist at Nomura Securities.
"If India's imports remain steady, WTI is likely to stay within the $60-$70 range for the rest of the month," he said.
The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September, a move that will end its most recent output cut earlier than planned.
The OPEC+ pumps about half of the world's oil and had been curtailing production for several years to support the market, but the group introduced a series of accelerated output hikes this year to regain market share.
At the same time, U.S. demands for India to stop buying Russian oil as Washington seeks ways to push Moscow for a peace deal with Ukraine could upset supply flows as Indian refiners seek alternatives and Russian crude is redirected to other buyers.
Trump on Tuesday again threatened higher tariffs on Indian goods over the country's Russian oil purchases over the next 24 hours. Trump also said declining energy prices could pressure Russian President Vladimir Putin to halt the war in Ukraine.
New Delhi called Trump's threat "unjustified" and vowed to protect its economic interests, deepening a trade rift between the two countries.
Nomura's Takashima also pointed to industry data showing crude inventories in the U.S., the world's biggest oil consumer, as supportive for the oil market.
U.S. crude inventories fell by 4.2 million barrels last week, sources citing American Petroleum Institute figures said on Tuesday. That compares with a Reuters poll estimate of a 600,000 barrels draw for the week to August 1.
The U.S. Energy Information Administration is due to release its weekly inventory data on Wednesday.
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