WionDrive News Desk 
Global oil markets continued to face downward pressure on Wednesday, with prices hovering near their lowest levels in four months. Brent crude futures inched up 26 cents, or 0.3%, to USD 77.78 a barrel by 0825 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 24 cents, or 0.3%, to USD 73.49. However, both benchmarks witnessed a significant decline on Tuesday, settling at their lowest levels since early February, after shedding around USD 3 a barrel on Monday.
The recent slide in oil prices can be attributed to the Organization of the Petroleum Exporting Countries (OPEC) and its allies’ plans to increase supply from the fourth quarter, despite growing concerns over weakening demand growth. This move has raised fears of an oversupplied market, weighing heavily on sentiment.
“The abundant supply picture at present undoubtedly is generating queasiness even from those not in the perennial OPEC-sceptic camp,” commented Helima Croft, the head of commodities research at RBC Capital, in a market note.
However, Saudi Arabian energy minister Prince Abdulaziz bin Salman has sought to allay concerns, stating that OPEC+ would pause the unwinding of output cuts or even reverse them if demand proves insufficient to absorb the additional barrels. “The intention has always been to slow roll the barrels back in and not to send the market into a tailspin with a supply surge,” Croft added.
Adding to the bearish sentiment, data from the American Petroleum Institute (API) revealed that U.S. crude stocks increased by more than 4 million barrels in the week ended May 31, significantly higher than the 2.3 million barrel decline forecast by analysts polled by Reuters. Gasoline stocks also rose by over 4 million barrels, twice the build expected by analysts.
“Renewed inventory draws are needed to push oil prices higher,” said Giovanni Staunovo, an analyst at UBS, who remains bullish on expectations that oil supply growth would lag demand growth over the coming months.
The official stockpile data from the U.S. Energy Information Administration (EIA), scheduled for release at 1430 GMT on Wednesday, is being closely watched by markets as it will reflect fuel usage around the Memorial Day holiday, traditionally marking the start of the U.S. driving season.
While concerns over weakening demand growth and the prospect of increased supply weighed on prices, some support was provided by data showing a larger-than-expected decline in U.S. job openings in April. This development could bolster the Federal Reserve’s efforts to combat inflation and strengthen the case for cutting interest rates, potentially boosting economic growth and, by extension, energy demand.
As the tug-of-war between supply and demand dynamics continues, market participants will closely monitor OPEC+ decisions, U.S. inventory levels, and broader economic indicators to gauge the direction of oil prices in the coming weeks and months.
