During Thursday’s Asian trading session, the price of West Texas Intermediate (WTI) crude oil experienced a slight decline, hovering around $57.80. This downturn follows significant volatility in the market, with WTI witnessing its most substantial monthly decline since November 2021. The decline has been attributed to growing fears of a global economic slowdown, further exacerbated by Saudi Arabia’s strategy of prioritizing its market influence over higher oil prices.
Reports have indicated that Saudi Arabia is prepared to maintain lower oil prices instead of implementing further production cuts. The decision reflects the kingdom’s commitment to its economic strategy and suggests a willingness to endure reduced earnings in the short term to secure long-term positioning in the global oil market. Historical patterns indicate that when OPEC+ leaders opt for compliance through supply adjustments, they typically pursue this approach until their objectives are met, leading to sustained market pressure.
Adding to the bearish sentiment surrounding WTI, recent economic data from the United States has raised additional concerns. The Bureau of Economic Analysis disclosed that the US economy contracted at an annualized rate of 0.3% in the first quarter of 2025, which is seen as a potential indicator that ongoing tariffs may be hindering economic progress.
However, there is a contrasting development in crude oil inventories that could lend some support to WTI prices. According to the Energy Information Administration (EIA), US crude stockpiles unexpectedly decreased by 2.696 million barrels for the week ending April 25. This decline stands in stark contrast to the previous week’s inventory increase of 244,000 barrels and surpasses market predictions of a 600,000 barrel drop. This unexpected reduction may signal increasing demand, although its effect on the price trajectory remains to be seen.
