Oil prices edged lower on Wednesday as an industry report indicated an increase in U.S. crude stockpiles and tariff concerns impacted market sentiment. However, stronger refining margins helped to mitigate the market’s decline. Brent futures decreased by 25 cents, or 0.3 percent, settling at $76.75 a barrel by 04:08 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell by 28 cents, or 0.4 percent, to $73.04 a barrel.
The drop in prices ended a three-day streak of gains, during which Brent surged by 3.6 percent and WTI increased by 3.7 percent. According to sources citing data from the American Petroleum Institute, crude oil stockpiles in the U.S., the largest oil producer and consumer globally, rose by 9.4 million barrels for the week ending February 7. Gasoline inventories, on the other hand, decreased by 2.51 million barrels, while distillate stocks saw a reduction of 590,000 barrels, as indicated by the API data.
Key insights from EIA data
Data from the Energy Information Administration (EIA) is set to be released later on Wednesday. The EIA has revised its estimate for U.S. crude production upwards, now projecting an average output of 13.59 million barrels per day in 2025, a slight increase from the previous estimate of 13.55 million bpd, while maintaining its demand forecast.
Tariff concerns impact market sentiment
Oil prices also faced downward pressure due to worries that various U.S. tariffs, either enacted or threatened, could hinder global economic growth and energy demand. Nevertheless, stronger refining margins helped to cushion price losses overall. Complex refining margins in Singapore recovered from January’s losses, averaging at $3 a barrel or more over the past week, according to LSEG pricing data.
Waiting for consumer price index data
On the macroeconomic front, traders are keenly awaiting the release of key U.S. consumer price index data, scheduled for 1330 GMT on Wednesday, which may provide insights into the state of the economy and the potential implications for interest rates. U.S. Federal Reserve Chair Jerome Powell stated on Tuesday that the Fed is not in a rush to implement further interest rate cuts but is prepared to do so if inflation decreases or the job market shows signs of weakening.
