Oil prices depreciated on Wednesday as US fuel inventory increased and concerns about wider economic impact from US tariffs outweighed some signs of increasing demand.
Brent crude futures went down by 19 cents or 0.3 per cent to $68.52 per barrel and the US West Texas Intermediate (WTI) crude futures declined by 14 cents or 0.2 per cent to $66.38 per barrel.
Even as crude oil inventories in the US decreased by 3.9 million barrels during the week ending July 11, according to data from the US Energy Information Administration (EIA) released on Wednesday, gasoline (petrol) stocks rose by 3.4 million barrels last week.
The build brings commercial stockpiles to 422.2 million barrels according to government data, which is still 8 per cent below the five-year average for this time of year.
President Donald Trump’s tariff war remained in focus with the European Commission preparing possible retaliation if talks with the US fail to secure a trade agreement for the European Union.
On Monday, Mr Trump said the US would impose very severe tariffs on Russia in 50 days if there is no deal to stop the war in Ukraine.
Meanwhile, the market is also looking at developments that followed a report that President Trump was likely to fire Federal Reserve Jerome Powell soon. Although, he later said he was not planning to fire the US central bank leader, but declined to rule out anything.
Interest rate cuts typically boost economic activity and energy demand, and pressure has been on the Federal Reserve to cut rates.
US economic activity increased slightly in recent weeks, but the outlook was neutral to slightly pessimistic, with focus on President Trump administration’s higher tariffs, which is believed to be putting upward pressure on prices.
In a monthly report on Tuesday, the Organisation of the Petroleum Exporting Countries (OPEC) left its forecasts for global oil demand growth unchanged in 2025 and 2026 after reductions in April.
OPEC also said the global economy may perform better than expected in the second half of the year despite trade conflicts and refineries’ crude intake would remain elevated.
OPEC and its allies (OPEC+) agreed on July 5 to raise production by 548,000 barrels per day in August, further accelerating output increases at its first meeting since oil prices jumped, then retreated.