Oil falls as end of driving season looms, Druzhba restarts

By Alex Lawler

LONDON, Aug 28 (Reuters) - Oil fell on Thursday after rising in the previous session, pressured by expectations of lower U.S. fuel demand at the end of the summer travel season and by the restart of Russian supply to Hungary and Slovakia through the Druzhba pipeline.

Crude had risen on Wednesday after official data showed U.S. crude inventories fell by 2.4 million barrels in the week ended August 22, compared with analysts' expectations in a Reuters poll for a 1.9-million-barrel draw, a sign of strong demand.

However, oil market participants see the upcoming U.S. Labor Day long weekend as the unofficial end of the summer driving season, and the onset of lower U.S. demand for gasoline.

Brent crude futures LCOc1 dropped 28 cents, or 0.4%, to $67.77 at 1033 GMT, and West Texas Intermediate (WTI) crude futures CLc1 declined 21 cents, or 0.3%, to $63.94.

"This weekend's U.S. bank holiday marks the end of the driving season and gasoline has hardly been the panacea hoped for in terms of demand," said John Evans of oil broker PVM.

"Any short-term reasons to be friendly towards oil prices are diminishing," he added, citing the Druzhba resumption.

Russian crude supplies to Hungary and Slovakia through the Druzhba pipeline have restarted after an outage caused by a Ukrainian attack in Russia last week, Hungarian oil company MOL and Slovakia's economy minister said on Thursday.

Traders are also watching out for how New Delhi responds to pressure from Washington to stop buying Russian oil, after U.S. President Donald Trump doubled tariffs on imports from India to as much as 50% on Wednesday.

"India is expected to continue purchasing crude oil from Russia at least in the short term, which should limit the impact of the new tariffs on global supply," IG market analyst Tony Sycamore said.

Lending some support to prices, Russia and Ukraine have stepped up attacks on each other's energy infrastructure.

Russia launched a massive drone attack on energy and gas transport infrastructure across six Ukrainian regions overnight, leaving more than 100,000 people without power, Ukrainian officials said on Wednesday.