WTI Crude Oil Prices Weaken as EIA Reports Sudden Build in US Inventories

WTI crude oil is trading bearish on Friday, falling after the release of the EIA report revealed weak demand for oil in the US despite some sectors of the economy reopening. At the time of writing, WTI crude oil is trading at around $33.15 per barrel.

According to the EIA report, crude inventories in the US increased by 7.9 million barrels during the previous week. The build was far higher than the 5 million barrel increase registered previously and also beat economists’ forecast, which was for a rise by 2.5 million barrels instead.

Crude oil prices have also come under pressure this week on account of escalating tensions between the US and China. On Thursday, China passed the national security bill on Hong Kong and US President Donald Trump is expected to announce his response to this move later today, which could send the market sentiment into a risk-off mode and impact oil prices.

Despite these developments, WTI crude oil prices are all set to post a gain for the fifth consecutive week, having risen by 1.5% so far this week. Oil traders have been buoyed by the deeper supply cuts by leading oil producers even as economic activity restarts across several parts of the world.

In the coming days, the movement in crude oil prices can be influenced by developments surrounding the upcoming OPEC meeting. Some OPEC countries are interested in extending supply cuts of nearly 10 million bpd beyond the current deadline which ends in June.

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Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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