WTI drops to $66 over weak US oil demand

West Texas Intermediate (WTI) halted its three-day winning streak, trading around $66.00 a barrel in the early European hours on Thursday. Prices depreciated as a build in US crude stockpiles increased concerns over weak demand from the US, the world’s largest oil consumer.

Brent crude is also shedding ground, trading at $68.25 after its previous daily close at $68.88.

US Crude Oil Stocks Change reported a surprise increase of 3.845 mln barrels in the week ended June 27, against market expectations of a 2.0 mln-barrel decrease and a previous decline of 5.836 mln, according to data from the Energy Information Administration (EIA) Petroleum Status Report.

Additionally, crude oil prices receive downward pressure from signs of the Organisation of Petroleum Exporting Countries (OPEC) and its allies, such as Russia, known as OPEC+, raising their production by 411,000 barrels per day (bpd) at their meeting this weekend, per Reuters.

This output increase will raise the total gain to 1.78 mln barrels per day in 2025, equivalent to more than 1.5% of global oil demand.

Traders adopt caution over the possibility of US tariffs being reinstated, which could cause lower fuel demand. Uncertainty increases around US trade policy as the 90-day pause on the implementation of higher tariffs will end on July 9 without any new trade deals with several large trading partners, such as the European Union and Japan.

Moreover, China’s Caixin Services PMI declined to 50.6 in June from 51.1 in May, missing the market forecast of 51.0. The data indicated that service sector activity in the world’s largest oil-importing country grew at its slowest pace in nine months in June, as demand softened and new export orders declined.

(Source: OANDA)