WTI Oil Decline Resumes, as Trump Talks Down Prices and EIA Inventories Climb
Although crude oil prices have rebounded from their April lows, they are still erratic due to trade news, inventory levels, and political...
Quick overview
- Crude oil prices have rebounded from April's lows but remain volatile due to trade developments and political pressures.
- Recent trade optimism between the US and China temporarily lifted oil prices, with WTI nearing $63 per barrel.
- A significant increase in U.S. crude inventories has capped gains, pushing prices back down after failing to break key resistance levels.
- Political pressure from President Trump advocating for lower oil prices adds further uncertainty to the market outlook.
Live USOIL Chart
Although crude oil prices have rebounded from their April lows, they are still erratic due to trade news, inventory levels, and political pressure.
In early April, the implementation of global trade duties sent shockwaves through commodity markets, causing West Texas Intermediate (WTI) to collapse to around $55 per barrel. A technical support zone emerged at those levels, briefly stabilizing prices before a tentative rebound took hold.
Trade Optimism Offers Temporary Relief
Recent headlines pointing to progress in US–China trade negotiations helped lift sentiment, with Brent crude reaching above $66 and WTI climbing near $63. Hopes that the tariff dispute could be resolved sooner than expected led to a brief recovery across risk assets, including oil.
Inventory Build Caps Gains
However, fresh data from the U.S. Energy Information Administration (EIA) revealed a 4 million barrel increase in domestic crude inventories for the week ending May 9. This supply boost weighed on prices, pushing WTI back below $63, down roughly $1 on the day, especially after failing to break above the 50-day Simple Moving Average (SMA), a key resistance level.
Kazakhstan Output Drop Adds Brief Support
A short-lived rally followed news that Kazakhstan’s oil output had declined in April, hinting at tightening global supply. However, the rebound proved temporary as selling pressure resumed in the US session.
Political Pressure: Trump Favors Lower Oil Prices
Additional downside momentum came from reports that President Donald Trump is actively advocating for lower oil prices. Analysis from Goldman Sachs, citing Trump’s social media commentary, suggests the White House is comfortable with WTI in the $40–$50 range, a level that could cap any sustained rally.
Weekly U.S. Energy Inventory Data (Week Ending May 9) from the U.S. Energy Information Administration (EIA)
- Crude Oil Inventories
+3.45 million barrels - Significantly above expectations of a -1.08 million barrel draw
- Prior week showed a draw of -2.03 million barrels
- Signals a surprise build in crude stockpiles, adding pressure on oil prices
- Gasoline Inventories
-1.02 million barrels - Larger than the expected draw of -561K barrels
- Suggests slightly stronger demand or seasonal usage patterns kicking in
- Distillate Inventories (includes diesel and heating oil)
-3.16 million barrels - Far larger draw than the expected +129K build
- Indicates strong industrial or export demand for middle distillates
- Refinery Utilization Rate
Rose +1.2% week-on-week, versus +0.8% forecast - Indicates refineries are ramping up production, possibly in anticipation of summer driving season demand
Private Inventory Data (API report released prior)
- Crude: +4.29 million barrels
- Gasoline: -1.37 million barrels
- Distillates: -3.68 million barrels
- These figures largely aligned with official EIA data, reinforcing the surprise build in crude and the notable draws in refined products.
Key Takeaway:
The latest weekly data paints a mixed picture for the U.S. oil market. While crude inventories rose sharply, catching the market off guard, refined product stocks (gasoline and distillates) dropped more than expected—pointing to resilient downstream demand.
Increased refinery activity further underscores preparation for higher fuel consumption ahead. However, the crude build may weigh on prices in the short term, especially if demand expectations falter or export flows soften.
Conclusion: Volatile Path Ahead for Oil Markets
Despite some encouraging trade signals, rising inventories and political headwinds are keeping crude oil gains in check. Unless fundamental supply-demand imbalances shift or geopolitical risks flare, prices may remain range-bound in the short term—particularly if technical resistance levels like the 50-day SMA continue to reject upward moves.
US WTI Crude Oil Live Chart
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals