West Texas Intermediate (WTI) crude oil prices fell sharply to around $66.45 during the early Asian trading session on Thursday, marking their lowest levels since December 2021. The sharp decline comes as US crude oil inventories surged far beyond market expectations.
According to the latest weekly report from the Energy Information Administration (EIA), US crude oil stockpiles rose by 3.614 million barrels for the week ending February 28. This was a stark contrast to the previous week’s decline of 2.332 million barrels. Market forecasts had anticipated a slight decrease of 290,000 barrels.
The drop in WTI prices was further exacerbated by OPEC+’s decision to continue with its planned production increase starting in April. The Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to boost output for the first time since 2022, which contributed to additional downward pressure on the oil market.
Adding to the negative sentiment, oil traders are increasingly concerned about the potential economic slowdown caused by new tariffs on goods from Canada, Mexico, and China. The tariffs, which took effect on Tuesday, are feared to impact global growth and dampen oil demand.
While former President Donald Trump had previously set the tariff date for April, he confirmed that the new tariffs would be imposed earlier than expected, with an exemption granted to automakers for a one-month period.
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