Oil Dips Over 1% as Surging U.S. Fuel Stocks Overshadow Crude Draw and Demand Fears Rise
Oil prices fell by just over 1% on Wednesday following the release of U.S. government data revealing a sharp and unexpected rise in gasoline and diesel inventories. The Energy Information Administration reported that gasoline stocks jumped by 5.2 million barrels and distillate stockpiles rose by 4.2 million barrels—far exceeding analysts’ expectations. This surge in refined fuel supplies raised concerns about weak demand, especially in the face of rising global oil production.
Brent crude futures settled down 77 cents at $64.86 a barrel, while U.S. West Texas Intermediate (WTI) crude closed 56 cents lower at $62.85. Despite a notable crude oil inventory draw of 4.3 million barrels, analyst Giovanni Staunovo from UBS called the report bearish, pointing out that the build-up in refined products suggests an imbalance between supply and actual consumption. Refinery demand for crude spiked, but that didn’t translate into equivalent fuel demand.
Adding to investor unease, the OPEC+ alliance plans to increase output by 411,000 barrels per day in July, a move likely to expand global supply at a time when economic uncertainty looms. Russia’s oil and gas revenues plummeted by 35% in May, raising the possibility that Moscow may resist further OPEC+ production hikes to avoid deepening revenue losses amid weak prices.
The global demand outlook was further clouded by economic concerns. The OECD cut its global growth forecast, blaming the economic drag from U.S. trade policies under President Trump. This slower growth outlook directly impacts projected energy consumption and contributes to oil market volatility. Trade tensions between the U.S. and China continue to stoke investor anxiety, with a potential phone call between Trump and President Xi Jinping expected later this week.
Earlier this week, oil prices had climbed nearly 2% on fears of supply disruptions and geopolitical tensions involving Iran. However, the latest inventory data and macroeconomic concerns have since shifted market sentiment, pushing prices lower and casting doubts over the sustainability of a recovery in oil demand in the second half of 2025.
Source: Business day