WTI drops to near $73.00 due to builds in US Oil stockpiles
- WTI price continues its losing streak as US crude Oil stocks surged by 4.052 million barrels in the last week.
- OPEC+ allowed eight member countries to gradually unwound Oil cuts starting in October.
- Oil traders monitor the Israel-Hamas situation, as the failure of a peace deal could bolster crude Oil prices.
West Texas Intermediate (WTI) Oil price has dropped to four-month lows, trading around $73.10 per barrel during the Asian session on Wednesday. The American Petroleum Institute’s (API) Weekly Statistical Bulletin (WSB) reported that crude Oil stocks surged by 4.052 million barrels for the week ending May 31, reversing a prior week's decline of 6.490 million barrels and defying market expectations of a 1.900 million-barrel draw.
Crude Oil prices are being pressured by signs of rising global supplies coupled with an uncertain demand outlook. On Sunday, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to extend most of their supply cuts into 2025 but allowed for voluntary cuts from eight member countries to be gradually unwound starting in October. By December, more than 500,000 barrels per day (bpd) are expected to re-enter the market, with a total of 1.8 million bpd returning by June 2025, according to Reuters.
In the Middle East on Tuesday, Osama Hamdan, a Hamas official, stated during a televised press conference, as reported by Reuters, that Hamas cannot agree to any deal unless Israel makes a "clear" commitment to a permanent ceasefire and a complete withdrawal from the Gaza Strip.
Qatar, which has been mediating talks between Hamas and Israel alongside the United States and Egypt, has also urged Israel to provide a clear position that is backed by its entire government to facilitate reaching a deal. Oil traders will be closely monitoring further developments, as the failure of a peace deal could lead to an increase in crude Oil prices.