Global oil prices eased on Thursday as traders weighed signs of weakening U.S. demand against mounting concerns about oversupply. Brent crude fell 0.6% to $67.12 per barrel, while U.S. West Texas Intermediate (WTI) slipped 0.7% to $63.22. The retreat comes a day after both benchmarks rallied more than $1 following heightened geopolitical tensions in the Middle East and Eastern Europe.
Analysts say Wednesday’s gains were largely driven by Israel’s attack on Hamas leadership in Qatar and Poland’s scramble to shoot down suspected Russian drones straying into its airspace. However, the events are not expected to immediately disrupt global oil supplies. Market focus has instead shifted back to fundamentals such as rising stockpiles, slowing producer prices, and a weaker U.S. labor market—indicators of a softening American economy.
Data from the U.S. Energy Information Administration showed crude inventories climbing by 3.9 million barrels in the week ending September 5, compared with expectations of a 1-million-barrel draw. Gasoline stocks also rose by 1.5 million barrels, defying forecasts of a small decline. According to IG market analyst Tony Sycamore, the inventory build and profit-taking after a three-day rally pressured prices further, especially as the summer driving season ends.
The Federal Reserve is expected to cut interest rates next week in response to easing labor market conditions, with some analysts speculating about a rare triple dissent pushing for a larger 50-basis-point cut. Meanwhile, the European Central Bank is widely tipped to hold rates steady. Traders are also awaiting Thursday’s U.S. inflation report, which could alter expectations of how aggressively the Fed eases monetary policy.
On the supply side, OPEC+ announced on Sunday that it will increase production starting in October, albeit at a slower pace than previous months. Still, the decision adds to downward pressure on crude prices, with the U.S. Energy Information Administration warning of large inventory builds ahead. “Despite lower trending prices and stagnating oil demand growth, producers—led by OPEC+—are adding barrels, which could push the market into oversupply and drive prices lower by late 2025,” consultancy Eurasia Group noted.
source: cnbc