Oil prices stabilized during Wednesday’s Asian trading session, easing after sharp gains seen earlier in the week. Market attention shifted toward a surprising increase in U.S. crude stockpiles and the Federal Reserve’s imminent interest rate announcement.
Earlier this week, crude surged on news that the U.S. planned sanctions targeting key purchasers of Russian oil, aiming to pressure Moscow over the Ukraine conflict. Additionally, positive momentum came from improved U.S.-EU trade relations following a recently finalized agreement.
However, the upward trend lost some steam after industry figures revealed an unexpected rise in U.S. oil inventories. Market participants also exercised caution ahead of the Fed’s policy meeting scheduled for Wednesday, alongside expectations of several important economic data releases throughout the week.
September Brent crude futures edged up 0.2% to $72.68 per barrel, while West Texas Intermediate (WTI) futures increased slightly by 0.1% to $69.28 per barrel as of 20:53 ET (00:53 GMT).
US crude stocks rise unexpectedly — API data
The American Petroleum Institute reported on Tuesday evening that U.S. crude inventories expanded by roughly 1.5 million barrels in the week ending July 25. This rise contrasted with forecasts predicting a 2.5 million barrel decline and reversed the modest drawdown seen the prior week.
The API figures often precede official government inventory reports due later Wednesday. An inventory build raises concerns about demand strength in the world’s largest oil consumer amid ongoing economic uncertainties.
A series of crucial U.S. economic indicators is expected this week, culminating with the Fed’s two-day meeting wrap-up on Wednesday, where interest rates are widely anticipated to remain steady.
Meanwhile, a robust U.S. dollar ahead of the Fed announcement put mild downward pressure on crude prices.
Friday’s calendar includes the all-important nonfarm payrolls report, a key gauge of labor market health. The same day also marks the deadline for President Trump’s steep trade tariffs, coinciding with Washington’s recent signing of limited trade agreements.
Asia eyes China PMIs and Bank of Japan decision
In Asia, attention turns to the purchasing managers’ index (PMI) data from China, the world’s top oil importer, due on Thursday. This release is expected to shed light on China’s economic outlook following the recent easing of trade tensions with the U.S.
The Bank of Japan is also scheduled to announce its interest rate decision on Thursday, with expectations favoring no change amid uncertainty surrounding trade developments and Japan’s political leadership.
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