WTI Drops Below $65.50 Amid Fears of Weakening Global Oil Demand

WTI Crude Slips Below $65.50 as Demand Worries Intensify

West Texas Intermediate (WTI) crude oil price dropped to around $65.40 early Wednesday during the Asian trading session. The decline follows growing concerns about weakening global energy demand amid increasing trade tensions.

Trade Tensions Add to Demand Uncertainty

Investors are reacting cautiously after President Trump signaled increased tariffs on trade partners failing to reach a deal with the U.S. Tariffs are expected to rise on August 1, with a 30% tariff threat looming over European Union imports. These developments are heightening fears of reduced global economic activity, translating to lower energy consumption.

Related Article: How Trade Wars Impact Global Oil Prices

Oil Supply Outlook: Iraqi Exports Resume

On the supply front, Iraq has officially resumed crude exports from the Kurdistan Region, halting a two-year freeze. With expectations to supply up to 230,000 barrels per day (bpd), this move could increase global oil supply, potentially applying downward pressure on WTI prices.

This development also marks progress in Iraq’s internal political dynamics and could further boost the country’s already significant export capacity.

US Crude Stockpiles Decline, Slightly Easing Pressure

Despite bearish sentiment, data from the American Petroleum Institute (API) showed a 577,000-barrel drop in U.S. crude oil inventories for the week ending July 18. This follows a massive 19.1 million-barrel increase in the prior week.

While the decline offers short-term relief, crude stockpiles remain 11 million barrels higher year-to-date, which still points to a well-supplied U.S. market.

Upcoming Event: Stay tuned for the EIA Weekly Crude Oil Stocks Report, due later today for further market direction.

Key Takeaways

• WTI crude oil falls to $65.40, pressured by trade and supply concerns.
• Trump’s tariff threats renew fears of reduced global fuel demand.
• Iraqi oil exports resume, boosting potential global oil supply.
• US crude inventories dip by 577,000 barrels last week, per API data.
• EIA report expected to influence short-term price movements.