Oil prices declined on Wednesday, with U.S. crude settling at its lowest level of the year, following a larger-than-expected rise in domestic crude stockpiles. Brent crude futures dropped $0.91 (1.2%) to $76.58 per barrel, while U.S. West Texas Intermediate (WTI) fell $1.15 (1.6%) to $72.62. The Energy Information Administration reported a 3.46 million-barrel increase in U.S. crude inventories, exceeding analyst expectations and marking the third consecutive weekly decline in refinery intake.
Meanwhile, the White House reaffirmed President Donald Trump’s plan to impose 25% tariffs on Canadian and Mexican imports starting February 1, adding to market uncertainty alongside sanctions on Russian energy and concerns over economic growth in key consuming nations. UBS analyst Giovanni Staunovo warned of continued volatility as investors navigate these developments.
The Federal Reserve held interest rates steady on Wednesday, offering little clarity on future rate cuts that could potentially stimulate economic activity and oil demand. Market participants also turned their attention to the upcoming OPEC+ ministerial meeting on February 3, where the group is expected to proceed with its planned supply increase in April despite Trump’s recent calls for lower oil prices.
Supply fears eased somewhat as Libya’s National Oil Corp confirmed normal export operations following talks with protesters who had threatened to disrupt loadings. However, analysts cautioned that Libya’s oil supply remains a geopolitical risk due to ongoing civil unrest.