Oil prices retreated in Asian trading on Thursday, reversing sharp gains from the previous session after US data revealed an unexpected rise in crude inventories, fueling concerns about weaker fuel demand.
- Brent crude for September delivery dropped 0.6% to $68.68 per barrel.
- West Texas Intermediate (WTI) futures declined 0.7% to $65.58 per barrel as of 21:19 ET (01:19 GMT).
Prices had surged 2.5% to 3% on Wednesday following Iran’s suspension of cooperation with the UN nuclear watchdog, heightening fears of renewed tensions in the Middle East. However, these gains were tempered by concerns over rising supply and slowing demand.
US Inventory Data Highlights Demand Worries
US crude oil inventories unexpectedly increased by 3.85 million barrels in the week ending June 27, defying forecasts of a 3.5 million barrel drawdown. Gasoline stocks also saw a substantial build of 4.19 million barrels, raising questions about summer fuel demand strength.
Attention now turns to the upcoming US nonfarm payrolls report for June, expected later Thursday, which could signal further cooling in the labor market and broader economic challenges for the world’s largest fuel consumer.
OPEC+ Plans Production Boost
The Organization of Petroleum Exporting Countries and allies (OPEC+) is scheduled to meet over the weekend, with reports indicating a planned output increase of 411,000 barrels per day starting in August. This production hike follows similar increases in recent months as the group gradually rolls back two years of deep cuts.
The production increase aims to balance economic pressures from sustained low oil prices and address concerns about overproduction within OPEC members. Meanwhile, US President Donald Trump continues to pressure the cartel to raise production and keep prices low, also urging US producers to boost output.
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