The price of West Texas Intermediate (WTI) crude oil hovered around $65.40 during the early hours of Wednesday in Asian markets, as renewed trade tensions and concerns over global fuel demand pressed on oil prices. The market reaction follows reports indicating that U.S. crude inventories declined by approximately 577,000 barrels last week, according to the American Petroleum Institute (API). This decrease may offer some support to WTI, which faced downward pressure amidst ongoing geopolitical and economic uncertainties.
Trade policies initiated by the U.S. continue to influence market sentiment. Recent statements suggest that reciprocal tariffs could increase on August 1 for trade partners that have yet to reach an agreement with the United States. Earlier threats of a 30% tariff on European Union imports have heightened fears of a slowdown in global economic activity, potentially diminishing energy consumption worldwide. Such developments have raised concerns among traders that reduced global growth could lead to lower demand for oil, thereby exerting further downward pressure on prices.
Meanwhile, escalation in global oil supply may also weigh on the market. Iraq has resumed crude exports from the Kurdistan Region after a hiatus exceeding two years, which is expected to increase Iraq’s export volumes by approximately 230,000 barrels per day. The resumption aims to improve relations between Baghdad and Erbil and could contribute to a boost in global oil supplies, thereby adding to the bearish outlook in the near term.
Despite some support from the recent decline in U.S. crude stocks, market participants remain cautious. The weekly inventory figures from the EIA are awaited later in the session, and traders are closely monitoring OPEC’s production decisions, which significantly influence global supply balances. Fluctuations in the U.S. dollar and geopolitical developments continue to be key factors affecting WTI prices, highlighting the complex interplay of supply, demand, and macroeconomic influences in the oil market.
