FX.co ★ Oil Falls on Demand Risks

On Thursday, WTI crude oil futures declined to approximately $68 per barrel, influenced by escalating concerns regarding potential widespread trade disruptions that may negatively impact oil demand. The market's attention is primarily drawn to a series of tariff impositions initiated by President Trump, with Brazil becoming the latest nation to face substantial duties, subsequent to earlier threats concerning copper imports and other countries. Further exacerbating the situation, the EIA disclosed a 7.1 million barrel increase in crude oil stockpiles last week, contrary to the anticipated 2.1 million barrel reduction. Nevertheless, inventories of distillates and gasoline saw a decline, with the latter pointing to robust demand. Additionally, losses were somewhat mitigated by renewed hostilities in the Red Sea, which interrupted a vital international shipping route. Concurrently, OPEC+ is preparing for another significant surge in output come September, as eight members scale down voluntary reductions, and the UAE moves towards a higher production quota. Despite the surge in supply, the UAE highlighted that inventories are not accumulating, indicating persistent strong demand.