Brent and WTI Oil Prices Decline Due to Unexpected Increase in U.S. Inventories

There has been a significant decline in oil prices on global commodity markets. As of 06:30 GMT, Brent crude oil futures fell by 16 cents, trading at $64.75 per barrel. The price of West Texas Intermediate (WTI) oil decreased by 10 cents to $61.47 per barrel.

This is reported by AgroReview

Reasons for Price Decline and Market Impact

Experts cite the unexpected increase in oil and fuel inventories in the United States as the main reason for the drop in prices. This has raised concerns in the market regarding demand from the U.S.—the world’s largest consumer of energy resources.

“The unexpected increase in inventories will exert downward pressure, especially on WTI. This may further stimulate the growth of oil exports from the U.S. to Europe and Asia,” the report states.

Despite these trends, some investors hope that the upcoming summer travel season in the U.S. will lead to a reduction in inventory levels, which could, in turn, help curb further declines in oil prices.

Additional Influencing Factors

The market is experiencing heightened caution among traders, who are avoiding opening large positions. This is influenced by several geopolitical and economic factors, including:

• Uncertainty regarding the progress of negotiations between the U.S. and Iran concerning the nuclear program.
• Reports of possible Israeli strikes on Iranian nuclear infrastructure.
• Statements from Ukraine regarding its intention to seek stronger sanctions against Russia from the European Union, which could further complicate the supply of Russian oil to global markets.

The combination of these factors maintains tension in the global oil market and affects price dynamics.