Oil Prices Fall over Demand, Supply Imbalance
Oil prices declined in the global commodity market on Wednesday over weak demand expectations as US inventory built. Report showed a larger-than-expected increase in US crude oil stockpiles, which signalled weakening demand in the world’s biggest oil consumer.
However, US President Donald Trump’s decision to reinstate the’maximum pressure’ policy on Iran raised concerns over global supply.
Brent crude fell by 0.09%, trading at $75.75 per barrel, while the US benchmark West Texas Intermediate (WTI) declined by 0.1%, settling at $72.23 per barrel, compared to its prior session close of $72.32.
Oil prices moved upwards after US President Donald Trump signed an executive order to reinstate the’maximum pressure’ policy on Iran.
Trump’s executive order directs the Treasury Department to impose ‘maximum economic pressure’ on Iran through sanctions designed to cripple the country’s oil exports.
‘We have to be strong and firm, and I hope that it’s not going to have to be used in any great measure at all,’ Trump commented. Trump’s latest decision heightened global supply disruption concerns, pushing oil prices higher.
In addition, Trump’s announcement that he suspended the tariffs he planned to impose on Mexico and Canada for a month continues to impact prices.
Experts state that while comprehensive tariffs will suppress oil prices in the short term, in the long run, this situation may lead to a trade war, which would negatively affect global growth and reignite inflation.
Meanwhile, data indicating a surprise build in crude oil inventories in the US, the world’s largest oil-consuming country, signaled weakening demand in the country and capped further price increases.
The American Petroleum Institute predicted that US commercial crude oil stocks increased by 5.25 million barrels last week compared to the previous week. Market expectations were for stocks to increase by 3.17 million barrels.
The US Energy Information Administration (EIA) will announce the official stock data during the day. #Oil Prices Fall over Demand, Supply Imbalance 2025 Budget: Osun Govt Targets N109bn IGR
