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At 11:36 GMT, Light Crude Oil Futures are trading $72.07, down $0.63 or -0.87%.
U.S. Crude Inventories Surge, Pressuring Prices
Crude oil prices dipped as traders reacted to an unexpected rise in U.S. crude inventories, signaling weaker near-term demand. According to the American Petroleum Institute (API), crude stocks increased by 5.03 million barrels for the week ending January 31, exceeding expectations. Gasoline inventories also climbed by 5.43 million barrels, while distillate stocks saw a notable decline of 6.98 million barrels.
Rising crude and fuel stockpiles in the world’s largest oil-consuming nation indicate softer demand, amplifying concerns that slowing economic activity and trade uncertainty could further weigh on energy markets. The official inventory report from the U.S. Energy Information Administration (EIA), expected later Wednesday, is projected to show a 2.4 million barrel build, which could add further pressure on prices if confirmed.
Sino-U.S. Trade War Raises Demand Concerns
Ongoing trade tensions between the U.S. and China continue to dampen the demand outlook for crude oil. Prices briefly fell by as much as 3% on Tuesday after China announced new tariffs on U.S. energy imports, including crude oil, liquefied natural gas, and coal. These retaliatory measures, imposed in response to fresh U.S. levies on Chinese exports, threaten to curb global trade and economic growth, which in turn could erode oil demand.
Analysts warn that escalating trade disputes could weaken business investment and consumer spending, further pressuring crude markets. “Trump tariff chaos and trade war is no good for global growth and oil demand growth,” said Bjarne Schieldrop, chief commodities analyst at SEB.
Iran Sanctions Could Tighten Supply Despite Demand Worries
While demand-side concerns are pressuring oil prices, potential supply disruptions from Iran are providing some support. U.S. President Donald Trump has reinstated his “maximum pressure” campaign against Tehran, seeking to curb its oil exports.
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