West Texas Intermediate (WTI) crude oil prices are trading around $69.00 during the early Asian session on Wednesday, experiencing some selling pressure that has pushed the price to a two-month low. Fears of weakening energy demand, coupled with concerns over US President Donald Trump’s tariff plans, are weighing on the commodity.
Analysts note that Trump’s proposed higher tariffs have raised inflation concerns within the US Federal Reserve (Fed), potentially leading the central bank to maintain higher interest rates for a prolonged period. This could slow economic growth and dampen energy demand. On Monday, Trump confirmed that US tariffs on imports from Canada and Mexico will proceed as scheduled when the month-long delay expires next week.
The latest weekly report from the American Petroleum Institute (API) revealed a decline of 640,000 barrels in US crude oil inventories for the week ending February 21, a sharp contrast to the previous week’s increase of 3.34 million barrels. Market expectations had been for a 2.3 million barrel rise.
In addition to these factors, the potential for peace talks between Russia and Ukraine is also limiting the upside for oil prices. Tamas Varga, an oil broker at PVM, highlighted that such discussions could lead to the lifting of Russian sanctions, which would allow unrestricted Russian oil supply to return to the global market, further pressuring prices.
