Oil prices pulled back during Asian trading on Thursday, giving up some of the strong gains recorded in the previous session after U.S. government data showed a larger-than-expected increase in crude stockpiles. This unexpected build heightened worries about weakening fuel demand amid a backdrop of rising supply.
- September Brent crude slipped 0.6%, settling around $68.68 per barrel.
- West Texas Intermediate (WTI) futures fell 0.7%, trading near $65.58 per barrel as of 21:19 ET (01:19 GMT).
Oil prices had jumped between 2.5% and 3% on Wednesday, triggered by Iran’s decision to halt cooperation with the United Nations nuclear watchdog. This development sparked fears of escalating tensions in the Middle East. Still, those gains were partly offset by concerns about growing inventories and sluggish demand.
U.S. Inventory Report Fuels Demand Uncertainty
U.S. crude oil stockpiles rose by 3.85 million barrels for the week ending June 27, contrary to analysts’ predictions of a drawdown of 3.5 million barrels. Gasoline inventories also increased significantly, adding 4.19 million barrels, casting doubt on the strength of summer fuel consumption.
Market focus now shifts to the release of June’s U.S. nonfarm payrolls data, anticipated later on Thursday. The report could offer clues about the broader economic outlook and labor market health in the world’s largest oil-consuming country.
OPEC+ Readies Output Increase
The Organization of Petroleum Exporting Countries and its allies, known as OPEC+, are set to meet over the weekend. Sources indicate that the group plans to raise oil production by approximately 411,000 barrels per day starting in August. This move would continue a gradual easing of deep supply cuts implemented over the past two years.
The decision aims to alleviate economic pressures caused by persistently low oil prices and address concerns of excess supply within OPEC members. Meanwhile, U.S. President Donald Trump has continued urging the cartel to increase output to keep prices down and has encouraged American producers to ramp up production.