Source: Parth Sanghvi
Oil prices experienced a slight downturn in Asian trading hours on Wednesday, following a four-day rally. This was largely attributed to an unexpected increase in U.S. crude inventories and a tempered enthusiasm in the market following President Trump’s visit to the Middle East. Earlier optimism stemmed from a U.S.–China tariff truce and softer inflation data.
Crude Prices Slip Amid Inventory Bump
The international benchmark Brent Crude for June delivery slipped by 0.4%, bringing the price down to $66.38 per barrel. Similarly, West Texas Intermediate (WTI), the U.S. benchmark, also for June delivery, followed suit by dropping 0.4% to $63.01 per barrel as of 22:02 Eastern Time (ET) / 02:02 Greenwich Mean Time (GMT).
Both benchmarks had witnessed a 2.5% surge on Tuesday, reaching a near two-week high. However, the American Petroleum Institute’s announcement of a surprise increase in U.S. crude inventories led to a retracement of these gains.
Tariff Truce and Inflation Data Fuel Rally
Earlier in the week, a trade deal between the U.S. and China had stoked positivity in the oil market. The Trump administration reduced the tariffs on Chinese goods from a staggering 145% to a significantly lower 30%. China reciprocated by trimming tariffs on U.S. goods from 125% to 10%. The 90-day pause that followed this move stimulated a risk-on shift, which bolstered oil prices on the back of stronger demand prospects.
Softer U.S. inflation data further fueled the rally. The Consumer Price Index (CPI) increased a mere 2.3% year-on-year (YoY) in April, lower than the expected 2.4% and by only 0.2% month-on-month (MoM). This restricted inflation growth reinforced hopes that lower tariffs wouldn’t reignite price pressures, thereby supporting economic growth and crude demand.
Middle East Developments Under Scrutiny
President Trump’s visit to Saudi Arabia also played a pivotal role in influencing oil prices. During his visit, he pledged to lift sanctions on Syria, which could potentially increase oil supply in the market. Trump also secured a massive $600 billion in Saudi investments for the U.S., which could have far-reaching implications for the U.S. economy and oil market.
Apart from this, the U.S. Treasury’s move to sanction firms involved in shipping Iranian oil to China added an element of supply-side uncertainty. This development came after recent progress in nuclear dialogues with Iran.
Inventory Surprise and Technical Levels
The American Petroleum Institute’s (API) weekly report revealed an unexpected rise in U.S. commercial crude stocks, contrary to forecasts of a draw. This played a significant role in capping the gains in oil prices. Traders are now eagerly awaiting the Energy Information Administration’s (EIA) official inventory data for confirmation of these numbers.
Tracking Real-Time Oil Prices
Investors and traders can stay updated on shifting benchmarks and futures curves, such as contango and backwardation, by using the Commodities API. It provides live and historical quotes for Brent, WTI, and other energy commodities.
What to Watch
Going forward, there are three major factors to watch. One, the EIA inventory release; a larger-than-expected build could push prices lower. Two, political signals from the Gulf region; any further U.S.–Gulf cooperation or tensions with Iran will influence supply forecasts. Three, trade negotiations; progress beyond the 90-day tariff pause could underpin longer-term demand growth.
By combining real-time oil data with key inventory and geopolitical events, investors and traders can navigate the next inflection points in the crude market.