Oil prices edged lower on Wednesday following an industry report indicating a rise in U.S. crude stockpiles, while concerns over tariffs dampened market sentiment. However, stronger refining margins helped limit losses.
Brent crude futures dropped by 25 cents, or 0.3%, to $76.75 per barrel as of 0408 GMT, while U.S. West Texas Intermediate (WTI) crude declined by 28 cents, or 0.4%, to $73.04 per barrel. This decline halted a three-day winning streak in which Brent gained 3.6% and WTI rose by 3.7%.
Data from industry sources revealed that crude inventories in the United States, the world’s largest oil producer and consumer, surged by 9.4 million barrels in the week ending February 7. Meanwhile, gasoline stockpiles fell by 2.51 million barrels, and distillate stocks declined by 590,000 barrels. Official data from the U.S. Energy Information Administration (EIA) is expected to be released later in the day.
The EIA also raised its forecast for U.S. crude production, now estimating an average output of 13.59 million barrels per day in 2025, up from the previous projection of 13.55 million barrels per day.
Market sentiment was also weighed down by concerns over multiple U.S. tariffs that could hinder global economic growth and, in turn, reduce energy demand.
However, refining margins provided some support to prices. In Singapore, complex refining margins rebounded after January’s losses, averaging at least $3 per barrel over the past week, according to market data.
“Refinery margins have strengthened, reversing the negative trends of the previous month. There is strong demand for refineries to operate at higher capacity, especially as the turnaround season approaches in northwest Europe and Asia,” said a senior analyst at a commodity research firm.
On the economic front, investors are awaiting the release of key U.S. consumer price index data at 1330 GMT on Wednesday, which could offer insights into the country’s economic trajectory and potential interest rate movements.
Meanwhile, the U.S. Federal Reserve signaled a cautious approach, with Chair Jerome Powell stating on Tuesday that the central bank is not in a rush to implement further interest rate cuts. However, he emphasized that the Fed remains prepared to act if inflation declines further or the job market weakens.
