Oil edged down in a choppy session after US President Donald Trump implied that he favored low prices over sanctions as a means of pressuring Russia to end its war in Ukraine.
West Texas Intermediate fell 0.7% to trade below $64 a barrel after swinging in a roughly $1 range as Trump reiterated a commitment to low oil prices, limiting investors’ conviction that global efforts to squeeze Russian flows will pan out. Washington has signaled that the US wouldn’t follow through with threats to penalize Moscow’s crude unless Europe also acts.
Futures slid further after Trump told reporters that “if we get oil down, the war ends,” a sign of his preferred strategy to halt the flow of petrodollars that fund Russia’s war effort. He also repeated his calls for countries to stop buying Russian oil.
The commodity also followed fluctuations in US Treasury yields, with the optimism over monetary loosening after Wednesday’s quarter-point reduction in US interest rates tempered by the Fed’s cautious tone.
After the Fed’s cut, “we are back focusing on sanctions and geopolitics versus weak fundamentals,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management.
Traders have honed in on Russian flows over recent weeks amid intensifying Ukrainian attacks on the country’s energy infrastructure and as the European Union unveils a fresh package of sanctions on Moscow. Two more Russian oil refineries were attacked on Thursday as Ukraine stepped up strikes, and further closures threaten to tighten global oil balances and dent the Kremlin’s war chest.
As a result of the repeated Ukrainian strikes, Russian refining runs have now dropped below 5 million barrels a day, the lowest since April 2022, according to estimates from JPMorgan Chase & Co.
In the US, meanwhile, inventories of distillates — a group of fuels that includes diesel — reached the highest since January, while crude exports surged to the most since the end of 2023. Traders mostly discounted recent US stockpile data, which showed the adjustment factor ballooned even as crude inventories fell 9.29 million barrels.
“The push-pull between supply risks and a tight spot market versus anticipated surpluses is keeping crude locked in its range and less reactive to the risk rally lifting other assets,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group.
Crude is near the mid-point of the $5 band it has been trading in since early August. Prices have been buffeted by a return of OPEC+ barrels that has boosted predictions of a looming glut, and the economic impacts of US President Donald Trump’s tariffs.
The US benchmark’s October expiry on Friday also exacerbated price swings.
Prices
WTI for October delivery fell 0.7% to settle at $63.57 in New York.
Brent for November settlement edged down 0.8% to settle at $67.44 a barrel.
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