West Texas Intermediate (WTI), the benchmark for US crude oil, is trading around $66.45 during Thursday’s early Asian session, experiencing a significant drop to its lowest point since December 2021. The decline follows a larger-than-expected increase in US crude oil stockpiles, which has weighed heavily on market sentiment.
US Crude Oil Stockpiles Surge
According to the latest Energy Information Administration (EIA) report, US crude oil inventories for the week ending February 28 surged by 3.614 million barrels. This contrasts sharply with the previous week’s decrease of 2.332 million barrels, and far exceeds market expectations, which had forecasted a modest drop of 290,000 barrels.
OPEC+ Output Increase Plans Impact Prices
WTI prices are also under pressure from OPEC+’s decision to continue its plan to increase oil production starting in April. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have opted to raise output for the first time since 2022, further contributing to the downward pressure on crude prices.
Trade Tariffs Add to Market Uncertainty
Further compounding the market’s concerns, traders are wary of the new tariffs imposed on Canadian, Mexican, and Chinese goods, which went into effect this week. The tariffs, introduced by US President Donald Trump, have heightened fears of an economic slowdown that could hinder global demand for oil. Although Trump has delayed the implementation of tariffs on automakers for one month, the broader impact of the measures continues to dampen market confidence.
As the market grapples with these developments, WTI prices are facing significant headwinds, with traders closely monitoring inventory levels and geopolitical tensions that could further influence the commodity’s outlook.
