West Texas Intermediate (WTI), the U.S. crude oil benchmark, fell to around $61.55 during Asian trading hours on Thursday, pressured by an unexpected surge in U.S. crude inventories and renewed concerns over global oil demand.
According to the U.S. Energy Information Administration (EIA), crude oil stockpiles rose by 3.454 million barrels for the week ending May 9. This marked a sharp reversal from the previous week’s draw of 2.032 million barrels and significantly missed market expectations of a 1.0 million barrel decline. The surprise build has raised investor worries about oversupply in the market.
Adding to the downward pressure, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are on track to increase oil exports in May and June. OPEC’s output has already surpassed earlier projections, with production expected to climb by 411,000 barrels per day in May alone.
Meanwhile, easing global trade tensions have tempered recession fears, lifting risk sentiment and lending support to the U.S. dollar. A stronger dollar tends to weigh on dollar-denominated commodities like oil by making them more expensive for investors using other currencies.
While the trade optimism could act as a stabilizing force, the near-term outlook for oil remains clouded by inventory builds and supply-side pressures.
