Oil prices slipped on Thursday, erasing gains from the previous session, as a surprise increase in U.S. crude inventories raised fresh concerns about weak demand in the world’s largest oil-consuming nation.
- Brent crude futures fell 24 cents, or 0.35%, to $68.87 per barrel (as of 0044 GMT)
- U.S. West Texas Intermediate (WTI) crude also dropped 24 cents, or 0.36%, to $67.21 per barrel
Both benchmarks had climbed around 3% on Wednesday following geopolitical tensions involving Iran.
U.S. Crude Inventory Rise Surprises Market
According to the U.S. Energy Information Administration (EIA), domestic crude stockpiles rose by 3.8 million barrels, reaching 419 million barrels last week. Analysts had expected a drawdown of 1.8 million barrels, making the build a negative surprise for the market.
More worryingly, gasoline demand fell to 8.6 million barrels per day, sparking concerns over sluggish fuel consumption during what is typically the peak U.S. summer driving season.
Geopolitics and Trade Still in Focus
Wednesday’s oil rally was largely driven by Iran’s suspension of cooperation with the U.N. nuclear watchdog, renewing fears that Middle East tensions could escalate and disrupt oil supplies.
At the same time, a U.S.-Vietnam trade deal imposing 20% tariffs on certain Vietnamese exports brought a sense of stability in global trade dynamics, which some investors hope could bolster broader economic and energy demand.
Markets Eye U.S. Jobs Data for Fed Rate Clues
Traders are now turning their attention to the U.S. monthly employment report, expected later Thursday, which could shape expectations around potential interest rate cuts by the Federal Reserve in the second half of 2025.
Lower interest rates generally stimulate economic activity, which in turn can boost oil demand. However, a weaker private payroll report on Wednesday, which showed a decline in employment for the first time in two years, has added uncertainty — though analysts caution that private payroll figures don’t always align with official government data.
Outlook
Despite ongoing geopolitical risks and trade developments, demand-side pressures remain a key concern for oil markets. Until clearer signs of economic recovery or Fed policy direction emerge, prices may remain under short-term pressure.
