West Texas Intermediate (WTI) crude weakened for a second straight session, trading near $65.90 per barrel during Wednesday’s European session. Prices came under pressure after a sharp increase in US crude stockpiles heightened concerns about oversupply, while traders wait for the Energy Information Administration (EIA) data release later in the day.
According to the American Petroleum Institute (API), US crude inventories jumped by 11.4 million barrels in the week ending February 20, a sharp reversal from the previous week’s 0.609-million-barrel decline.
Despite the drop, downside in oil prices may remain limited as markets weigh geopolitical risks ahead of a third round of nuclear negotiations between the United States and Iran. In his State of the Union address, President Donald Trump emphasized diplomacy but accused Iran of rebuilding its nuclear capabilities and developing missiles that could threaten the US.
Iran’s deputy foreign minister stated that Tehran is willing to take all necessary steps to secure an agreement with Washington. Investors are also closely monitoring the Strait of Hormuz — a crucial shipping route responsible for about 20% of global oil transport — where any escalation could disrupt supply flows.
Meanwhile, traders are assessing how new US trade measures may affect oil demand after a 10% global tariff took effect on Tuesday, with proposals underway to raise the rate to 15%.
