Oil prices are down because the travel season is ending in the U.S
28 August 2025 08:57
Oil prices declined on Thursday after yesterday’s gains as investors fear a drop in U.S. fuel demand with the end of the summer season. Traders are also watching India’s reaction to new U.S. tariffs, "Komersant Ukrainian" reported, citing Reuters.
Brent crude futures were down 63 cents, or 0.91%, to $67.43 as of 07:02 Kiev time, while West Texas Intermediate (WTI) crude futures were down 62 cents, or 0.97%, to $63.55.
Both contracts rose during the previous session after the U.S. Energy Information Administration reported that the country’s crude oil inventories fell by 2.4 million barrels in the week ended August 22. That exceeded analysts’ expectations in a Reuters poll for a decline of 1.9 million barrels.
“Oil prices are pulling back this morning as traders reassess yesterday’s gains driven by the EIA report. While U.S. crude inventories did show another decline, the pace of decline has slowed from last week’s sharper drop, cooling the bullish momentum.”
– noted Priyanka Sachdeva, senior market analyst at Phillip Nova.
The decline in stocks signaled strong demand ahead of the long U.S. Labor Day weekend. However, this usually marks the unofficial end of the summer travel season and the beginning of a slowdown in U.S. demand, said IG market analyst Tony Sycamore.
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Increased supply and geopolitical factors
Traders are closely watching how New Delhi will react to Washington’s push to stop India buying Russian oil. U.S. President Donald Trump on Wednesday doubled tariffs on imports from India to 50%.
“India is expected to continue buying crude from Russia at least in the short term, which should limit the impact of the new tariffs on global supplies,”
– sycamore stated.
The market is also pressured by rising supply as major producers have canceled some voluntary production cuts, offsetting some of the supporting factors, including escalating mutual attacks by Russia and Ukraine on energy infrastructure.
US monetary policy outlook
The prospect of a near-term interest rate cut in the US is also supporting the oil market as it could potentially stimulate economic activity and oil demand.
Federal Reserve Bank of New York President John Williams said Wednesday that rates are likely to fall at some point, but policymakers will need to analyze future economic data before deciding whether a cut is appropriate at the Fed’s Sept. 16-17 meeting.
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