12 Mar 2025

WTI prices may encounter difficulties as concerns regarding demand increase in light of a possible economic slowdown in the United States. The dollar-denominated commodity received some support from a depreciating US Dollar. The API report revealed that US crude oil inventories rose by 4.247 million barrels last week, following a previous decline of 1.455 million barrels.

West Texas Intermediate (WTI) crude oil prices have experienced gains for the second consecutive day, trading at $66.40 during European trading hours on Wednesday. Nevertheless, oil prices are under downward pressure due to escalating worries about demand stemming from a potential US economic downturn and the repercussions of tariffs on global economic growth, which have constrained further increases.

Conversely, the weaker US Dollar may have mitigated the decline in oil prices, influenced by mounting apprehensions regarding an economic downturn in the United States. President Donald Trump characterized the economy as being in a "transition period," and investors interpreted these comments as a preliminary indication of possible instability.

US stock prices continued their downward trend on Tuesday, marking the most significant selloff in several months as investors responded to increased import tariffs and declining consumer confidence. The ongoing uncertainty regarding tariff changes, coupled with persistent concerns about the growth of the US economy, has led to a cautious sentiment in the oil market.

In a related development, a spokesperson for the Houthi group announced on Tuesday that they would target any Israeli vessels that violate their prohibition against Israeli ships operating in the Red and Arabian Seas, the Bab al-Mandab Strait, and the Gulf of Aden, with immediate effect.

In the United States, the latest report from the American Petroleum Institute (API) indicated that crude oil inventories increased by 4.247 million barrels for the week ending February 28, following a decrease of 1.455 million barrels the week prior. Analysts had anticipated a rise of 2.1 million barrels.

Furthermore, the US has aligned with other organizations in updating oil market forecasts. The International Energy Agency (IEA) has reduced its surplus projection for 2025 and halved its estimated oversupply for the upcoming year, attributing these changes to expected declines in crude production from Iran and Venezuela. The Energy Information Administration (EIA) has also forecasted a reduction in global oil inventories in the second quarter of 2025.