Crude oil futures saw a decline on Wednesday morning, as new industry data indicated a rise in U.S. oil inventories for the week ending February 7, signaling potential weakness in demand.
At 9:58 AM, April Brent oil futures were priced at $76.76, down 0.31%. Meanwhile, March West Texas Intermediate (WTI) crude futures fell by 0.35%, reaching $73.06.
U.S. Crude Oil Inventory Build
The American Petroleum Institute (API) reported a significant increase of 9.04 million barrels in U.S. crude oil inventories. This marked the largest inventory increase in over a year, pending confirmation from the U.S. Energy Information Administration (EIA) later in the day. The rise in inventories is seen as a sign of softening demand for crude oil in the U.S., one of the world’s largest oil consumers.
Market Concerns Over Tariffs and Economic Uncertainty
Market participants are also concerned about the potential impact of trade tariffs imposed by U.S. President Donald Trump. On Monday, Trump announced a 25% tariff on steel and aluminum imports, which has raised fears of disruptions to U.S. oil drilling infrastructure, particularly since the industry relies heavily on imported specialty steel.
The economic uncertainty tied to these tariffs, along with concerns about rising inflation, is contributing to market volatility. Investors are now awaiting the release of U.S. consumer price inflation data, which is crucial for shaping the Federal Reserve’s interest rate decisions. A potential rate hike could strengthen the dollar, making crude oil more expensive and dampening demand.
Global and Domestic Commodity Markets
In the domestic markets, February crude oil futures were trading at ₹6,336 on the Multi Commodity Exchange (MCX), down 0.49% from the previous close of ₹6,367. March crude oil futures on MCX stood at ₹6,331, a decrease of 0.42% from the previous close of ₹6,358.
Meanwhile, February natural gas futures on MCX were trading at ₹304.60, a drop of 0.56% from ₹306.30 on the previous close.
In agricultural commodities, March jeera futures were up by 0.34%, trading at ₹20,775, while March guargum futures fell by 0.21%, trading at ₹10,110.
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