Oil prices up 1% after Trump says India promised to stop buying Russian oil

Oil prices rose by around 1% in early trade on Thursday after U.S. President Donald Trump said Indian Prime Minister Narendra Modi had pledged his country would stop buying oil from Russia, which supplies about one-third of its imports.

Brent crude futures rose 57 cents, or 0.9%, to $62.48 a barrel at 0046 GMT. U.S. West Texas Intermediate (WTI) futures also added 0.9%, or 54 cents, to trade at $58.81.

Both contracts touched their lowest since early May in the previous session on U.S.-China trade tensions and after the International Energy Agency warned of a big surplus next year as OPEC+ producers and rivals lift output amid weak demand.

Trump said on Wednesday that India would halt oil purchases from its top supplier Russia, and the U.S. would next try to get China to do the same as Washington intensifies efforts to cut off Moscow’s energy revenues and pressure it to negotiate a peace deal in Ukraine.

India and China are the two top buyers of Russian seaborne crude exports, which are sanctioned by the U.S. and European Union. For months, Modi resisted U.S. pressure to stop buying Russian oil, with Indian officials defending the purchases as vital to national energy security.

“At the margin, this is a positive development for the crude oil price as it would remove a big buyer (India) of Russian oil,” said Tony Sycamore, a market analyst at IG.Later on Thursday, investors will be watching for the weekly U.S. inventory statistics release from the U.S. Energy Information Administration (EIA) after mixed data from the American Petroleum Institute (API) trade group.U.S. crude and gasoline stocks rose while distillate inventories fell last week, market sources said, citing API figures on Wednesday.

Crude stocks rose by 7.36 million barrels in the week ended October 10 and gasoline inventories increased by 2.99 million barrels, while distillate inventories fell by 4.79 million barrels from a week earlier, the sources said.

While lower distillate inventories point to stronger demand for diesel, a buildup in crude oil and gasoline stocks suggests demand in the U.S., the world’s top oil consumer, remains sluggish.

Analysts forecast that U.S. crude stockpiles rose by about 0.3 million barrels last week.