FX.co ★ Oil Falls on Higher Inventory Outlook

WTI crude oil futures dipped below $65 per barrel on Wednesday, continuing their decline from the previous day. This downward trend is attributed to revised and higher predictions for global oil inventory increases. According to the latest short-term forecast by the EIA, oil inventory builds are expected to average 0.8 million barrels per day in 2025, which is an increase of 0.4 million barrels per day from last month's prediction. The EIA attributes this to the combination of slowing growth in oil demand and rising production levels, which are projected to push global output beyond consumption rates. Meanwhile, some losses were mitigated by data from the API, indicating a reduction in US crude inventories by 0.37 million barrels last week, contrary to predictions of a 0.7 million-barrel rise, and following a 3.3 million-barrel decrease the preceding week. Moreover, advancements in US-China trade negotiations have bolstered overall market sentiment, alleviating concerns regarding the demand outlook. Negotiators revealed that the two parties have reached an initial agreement to carry out the terms of their Geneva consensus.