WTI rises to $66.50, upside limited on US growth concerns

West Texas Intermediate (WTI) gained ground for the second successive day, trading $66.40 during the European session on Wednesday. However, crude oil prices faced downward pressure amid rising demand concerns over a potential US economic slowdown and the impact of tariffs on global growth, which limited further gains.

However, a weaker US dollar might have limited the downside for oil prices, driven by growing fears of an economic downturn in the US. President Donald Trump referred to the economy as being in a “transition period,” and investors interpreted these remarks as an early warning of potential instability.

Adding to market uncertainty, US stock prices continued to decline on Tuesday, extending the largest selloff in months as investors reacted to higher import tariffs and weakening consumer sentiment. With ongoing ambiguity surrounding tariff developments and persistent worries over US economic growth, oil market sentiment remains cautious.

Meanwhile, a Houthi spokesperson announced late Tuesday that the group would target any Israeli vessel violating its ban on Israeli ships navigating through the Red and Arabian Seas, the Bab al-Mandab Strait, and the Gulf of Aden, effective immediately.

In the US, the latest American Petroleum Institute (API) report showed crude oil stockpiles rose by 4.247 million barrels for the week ending February 28, following a 1.455-million-barrel decline the previous week. Analysts had expected an increase of 2.1 million barrels.

Additionally, the US joined other agencies in revising oil market projections.

The International Energy Agency (IEA) cut its 2025 surplus forecast and halved its estimated glut for next year due to anticipated declines in Iranian and Venezuelan crude output. The Energy Information Administration (EIA) also projected a decline in world oil inventories in Q2 2025.

(Source: OANDA)