FX.co ★ Oil Firms as Supply Tightness Persists

WTI crude oil futures held near $102 per barrel on Wednesday, paring earlier losses after surging 7.6% over the previous three sessions, as escalating tensions in the Middle East and tightening global supplies continued to underpin prices. The IEA reported that observed oil inventories declined by about 4 million barrels per day in March and April, while Saudi Arabia informed OPEC that its output had fallen to its lowest level since 1990. The agency cautioned that with stocks already being drawn down at a record pace, further price volatility is likely ahead of peak summer demand, and that the market could remain heavily undersupplied until October even if the conflict were to end next month. At the same time, US government data showed that distillate inventories increased by 190,000 barrels last week—the first weekly build since March—easing some supply concerns. However, crude stocks dropped by 4.3 million barrels, nearly twice the decline anticipated by the market.