WTI US Oil steadies as geopolitical moves counter bearish inventory data

• WTI US Oil stabilizes near $58.30, recovering from a five-month low despite bearish US inventory data.
• The American Petroleum Institute reports a large 7.36M barrel build in Crude Oil stocks, offset by a drop in distillates.
• Market sentiment improves slightly after Washington's pressure on India to halt Russian Oil imports.

West Texas Intermediate (WTI) US Oil trades around $58.30 on Thursday, flat for the day at the time of writing, as it holds its rebound from a five-month low marked on Tuesday at $57.33.

The market digests mixed signals after the American Petroleum Institute (API) confirmed on Wednesday a larger-than-expected build of 7.36 million barrels in US Crude Oil inventories last week.

According to the API report, gasoline stocks increased by 3 million barrels, while distillate inventories declined by 4.8 million, offering contrasting signs about domestic energy demand. Analysts at ING, Ewa Manthey and Warren Patterson, said that the fall in distillates "provides mixed signals on consumption, but the crude build is clearly bearish for Oil in the near term."

Despite the bearish data, WTI remains resilient as investors focus on geopolitical developments. US President Donald Trump said on Thursday that Indian Prime Minister Narendra Modi had pledged to stop buying Russian Oil, according to the BBC. The announcement, together with comments from US Treasury Secretary Scott Bessent that Japan is also expected to halt Russian energy imports, raises expectations of tighter global supply.

Tony Sycamore, market analyst at IG, noted that India's move "is a marginally positive development for crude prices, as it removes a key buyer from Russia's export market."

Meanwhile, the United Kingdom (UK) imposed new sanctions on Lukoil and Rosneft, Russia's two largest Oil companies, and restricted dozens of shadow fleet tankers, further tightening the energy sanctions regime against Moscow.

On the macroeconomic data front, the US government shutdown, now in its third week, continues to weigh on sentiment and on the US Dollar (USD). A Treasury official estimated the closure is costing around $15 billion per week to the US economy, limiting demand expectations.

The market will closely watch the Energy Information Administration (EIA) Crude Oil Stocks Change data due later in the day, which is expected to show a modest 0.12M barrel increase after the 3.715M build recorded previously, for further clues on short-term supply dynamics.

Overall, the combination of geopolitical risk and supply uncertainty offsets part of the pressure from the bearish API data, keeping WTI stable near $58.30 for the day.