WTI drifts higher to near $58.40 as Trump says India will stop importing Russian oil

• WTI price edges higher to near $58.40 in Thursday’s early European session.

• Trump said Modi has agreed to stop buying Russian oil.

• The EIA weekly inventory statistics will be released later on Thursday. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $58.40 during the early European trading hours on Thursday. The WTI recovers from a five-month low after US President Donald Trump said Indian Prime Minister Narendra Modi had vowed to halt purchases of Russian barrels. Traders brace for the Energy Information Administration (EIA) Crude Oil stockpiles report later on Thursday. 

Trump stated that Modi has agreed to stop buying oil from Russia, adding that he would next try to get China to do the same as Washington seeks to tighten financial thumbscrews on the Kremlin as part of efforts to end the war in Ukraine, BBC reported late Wednesday.

US Treasury Secretary Scott Bessent also said that the Trump administration expects Japan to stop buying and importing energy from Russia. "We discussed issues related to economic relations between the countries and our expectation that Japan will stop importing Russian energy,” said Bessent.

"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.

The ongoing geopolitical risks might contribute to the WTI’s upside. Russia continued its attacks on Ukraine's energy system, leading to severe outages in around seven regions of eastern Ukraine. Trump said that he is considering sending long-range Tomahawk cruise missiles to Ukraine.

On the other hand, the US government shutdown has entered its 16th day. US Treasury official stated that the extended closure is costing around $15 billion per week to the US economy. A prolonged US federal shutdown could drag the Greenback lower and create a tailwind for the pair in the near term. A shrinking economy weighs down on the oil prices as demand for energy reduces.