Oil Gains on Report US-India Near Deal That May Cut Russia Flows
(Bloomberg) -- Oil jumped following a report that the US and India are nearing a trade deal that could see the South Asian nation gradually reducing imports of Russian crude, which would boost demand for alternative grades.
Brent advanced as much as 1.9% to trade above $62 a barrel, while West Texas Intermediate climbed toward $59. The potential agreement could also lower tariffs on Indian exports, according to the Mint newspaper, which cited three people with knowledge of the matter that it didn’t identify.
“A truce would be positive for economic momentum and prop up oil demand sentiment,” said Vandana Hari, the founder of market analysis firm Vanda Insights. “In the event that the deal entails a reduction in Indian imports of Russian crude, that would be supportive too.”
President Donald Trump on Tuesday said Prime Minister Narendra Modi assured him that India would wind down Russian oil imports — a trade that led to higher US tariffs. Modi acknowledged the call in a social media post on Wednesday, without mentioning the content of the discussion. The nation’s refiners have previously indicated they would trim, but not stop purchases.
Oil still remains on track for a third monthly loss as signs of a global surplus put downward pressure on prices, though that’s provided an opportunity for the Trump administration to buy crude for its strategic reserves. The US plans to purchase 1 million barrels for delivery in December and January.
Meanwhile, US crude stockpiles fell by 3 million barrels last week, while fuel inventories including gasoline dipped, according to a report from the American Petroleum Institute. Government figures are due later Wednesday.
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