Oil Prices Dip Slightly Amid U.S. Inventory Data and Tariff Concerns
Crude oil prices edged down on Wednesday due to larger-than-expected fuel stock builds in the U.S. and growing unease over the economic implications of American trade policies.
Brent crude fell by 19 cents to close at $68.52 a barrel, while U.S. West Texas Intermediate (WTI) dropped by 14 cents to $66.38.
According to the Energy Information Administration (EIA), gasoline inventories rose by 3.4 million barrels — defying forecasts of a 1-million-barrel decline — while distillates, including diesel, surged by 4.2 million barrels.
Crude oil stockpiles, however, declined by 3.9 million barrels, beating analyst expectations.
Commenting on the data, Andrew Lipow, president of Lipow Oil Associates, said, “I think the market is disappointed to see large builds in gasoline and distillate inventories as refiners are operating at near their highest levels of the year, turning oil into refined products.”
He added, “I think investors are also disappointed to see gasoline demand fall just after July 4, as we are now in the peak summer driving season.”
Meanwhile, U.S. President Donald Trump’s aggressive tariff stance remains a market concern, with potential penalties against Russia and trade tensions with the EU adding to global economic uncertainty.
Reports also surfaced that Trump might remove Federal Reserve Chair Jerome Powell, sparking speculation of interest rate cuts by September — a development typically supportive of energy demand.
The Federal Reserve’s latest economic assessment described current business sentiment as neutral to slightly pessimistic, citing tariff-related cost pressures.
On the global front, OPEC expressed optimism that the global economy would strengthen in the latter half of the year, driven by growth in Brazil, China, and India.
China’s refiners are ramping up activity post-maintenance to meet rising third-quarter fuel needs. Barclays estimates China’s H1 oil demand rose by 400,000 barrels per day year-on-year.
On the supply side, conflict in Iraq’s Kurdistan region has disrupted oil output by up to 150,000 barrels daily after a series of drone attacks on oilfields.
