Oil Dips as US Stockpile Gain Forecast Outweighs UAE Bullishness
Oil fell as signs of a large gain in US crude stockpiles undermined comments by the United Arab Emirates and Saudi Arabia about tight market conditions.
West Texas Intermediate futures fell about 0.5% to trade near $68 a barrel, following two days of advances. In the US, crude inventories rose 7.1 million barrels last week, according to the American Petroleum Institute. That would be the largest increase since January if confirmed by government data due later on Wednesday.
The expected inventory gain threw some cold water on UAE Energy Minister Suhail Al Mazrouei’s comments that a lack of major inventory buildups shows the market needs the production that OPEC+ is reviving, while Saudi Aramco sees healthy global demand despite trade challenges and tariffs.
“Current market conditions are reasonably tight,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “But I’m still somewhat concerned a surplus will grow into the autumn months as demand slows.”
In another headwind, Israel foreign minister Gideon Sa’ar says a ceasefire in the nearly two-year conflict in Gaza, as well as a hostage deal, is “achievable,” according to the AFP.
Oil surged during the Israel-Iran conflict, with Brent topping $80 a barrel, but has since retreated sharply. Attention has now shifted to OPEC+ supply and US trade policy, with multiple analysts highlighting near-term market tightness.
Meanwhile, Houthi attacks on cargo ships in the Red Sea — a key trade route for oil — have killed three crew members, sunk one vessel and left a second without propulsion.
Along with the UAE’s comments and the Red Sea threats, Russia’s crude shipments have recently plunged, pressuring supplies. Saudi Aramco expects global oil demand to rise by about 1.2 million to 1.3 million barrels a day for the rest of the year, after growing by around 1.5 million in the first quarter.
Source: Bloomberg
