Oil rises over 1% as investors weigh Trump's Russia stance, tariff threats
The most active Brent crude futures were up $1.02 or about 1.4%, to $72.69 a barrel by 01:25 p.m. ET (1726 GMT).
U.S. West Texas Intermediate crude was up $1.18 at $70.39 with investors largely shrugging off mixed U.S. data on crude and fuel inventories.
The Brent crude September contract that expires on Wednesday was up $1.02 at $73.53.
Both contracts had fallen nearly 1% earlier in the day.
On Tuesday, Trump said he would start imposing measures on Russia, such as secondary tariffs of 100% on trading partners, if it did not make progress on ending the war in Ukraine within 10 to 12 days, moving up from an earlier 50-day deadline.
He imposed a 25% tariff on goods imported from India starting August 1, along with an unspecified penalty for buying Russian weapons and oil. The U.S. also warned China, the largest buyer of Russian oil, that it could face huge tariffs if it kept buying.
JP Morgan analysts wrote that while China was unlikely to comply with U.S. sanctions, India has signaled it would do so, which could affect 2.3 million barrels per day (bpd) of Russian oil exports.
"Traders seem more focused on the tariffs (related to Russia) and the compliance by India is being taken as a positive towards crude prices," Dennis Kissler, senior vice president of trading at BOK Financial.
Meanwhile, U.S. crude inventories rose by 7.7 million barrels, the U.S. Energy Information Administration said, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel draw.
U.S. gasoline stocks fell by 2.7 million barrels compared with analysts' expectations in a Reuters poll for a 0.6 million-barrel draw. Distillate stockpiles, which include diesel and heating oil, rose by 3.6 million barrels versus expectations for a 0.3 million-barrel rise, the EIA data showed.
U.S. economic growth also rebounded more than expected in the second quarter, but that measurement grossly overstated the economy's health as declining imports accounted for the bulk of the improvement and domestic demand increased at its slowest pace in 2-1/2 years.
The Federal Reserve is expected to leave interest rates unchanged on Wednesday, even as President Donald Trump continued to push the U.S. central bank to cut borrowing costs.
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