Oil prices edged lower on Thursday as markets digested mixed signals from geopolitical tensions, US inventory data, and concerns over slowing global growth. While tighter supply risks linked to US President Donald Trump’s tariff threats offered some support, a surprise build in US crude inventories weighed on investor sentiment.
Brent crude futures for September delivery, which expire later today, fell 18 cents, or 0.3%, to $73.06 a barrel by 8:50 a.m. Saudi time. The more actively traded October contract declined 26 cents, or 0.4%, to $72.21. Meanwhile, US West Texas Intermediate (WTI) crude for September delivery slipped 17 cents, or 0.2%, to $69.83 a barrel.
Despite Thursday’s pullback, both benchmarks settled 1% higher on Wednesday amid lingering supply concerns tied to Russia and Iran.
Analysts say traders remain cautious ahead of an August 1 deadline set by President Trump, who has warned of sweeping 100% secondary tariffs on countries continuing to trade with Russia unless Moscow takes concrete steps to end the war in Ukraine. The warning accelerates an earlier 50-day timeline.
“Oil contracts have been caught in a holding pattern, oscillating within a tight range,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “Trump’s hawkish rhetoric on Russian oil sanctions supports tight-market premiums, but headwinds such as a strong dollar and disappointing global growth data are keeping gains in check.”
The potential for secondary sanctions—particularly on China, the top buyer of Russian crude—has stoked fears of tightening global supply. Toshitaka Tazawa of Fujitomi Securities noted that “concerns about supply disruptions are keeping buying interest alive, even as other indicators turn bearish.”
Further adding to market uncertainty, the US Treasury on Wednesday announced new sanctions targeting more than 115 individuals, entities, and vessels linked to Iran. The move follows a recent escalation in tensions, including US airstrikes on Iranian nuclear facilities in June.
On the supply side, the US Energy Information Administration (EIA) reported a surprise 7.7 million-barrel build in crude inventories for the week ending July 25, pushing total stocks to 426.7 million barrels. Analysts had anticipated a draw of 1.3 million barrels.
However, gasoline inventories fell by 2.7 million barrels to 228.4 million barrels—far exceeding expectations—which supported the outlook for strong summer driving demand.
“While the crude stock build surprised the market, the sharp draw in gasoline stocks offered some balance, reflecting continued consumer demand,” said Tazawa.
Overall, traders remain on edge ahead of next week’s deadline, with oil prices likely to remain volatile amid competing supply and demand signals.
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