Crude oil prices edged lower on Thursday as fresh concerns over weakening demand in the United States and China overshadowed geopolitical tensions tied to ongoing U.S.-Iran negotiations.
Brent crude, the global benchmark, declined 0.39 percent to settle at $69.11 per barrel, compared with $69.38 at the previous close. Meanwhile, U.S. benchmark West Texas Intermediate (WTI) crude fell 0.37 percent to trade at $64.61 per barrel, down from $64.85 recorded in the prior session.
The downward pressure followed the release of new inventory data from the United States, which indicated a sharp and unexpected rise in crude and gasoline stockpiles. The data intensified concerns that fuel consumption in the world’s largest oil-consuming nation may be slowing.
Figures published by the U.S. Energy Information Administration (EIA) showed that commercial crude oil inventories increased by approximately 8.5 million barrels in the week ending February 6. The build significantly exceeded analysts’ projections of roughly 700,000 barrels. Gasoline inventories also climbed by about 1.2 million barrels during the same reporting period.
Market analysts noted that such a substantial inventory build typically reflects either softer refinery demand or reduced end-user consumption, both of which signal cooling economic momentum.
In addition to U.S. demand concerns, oil traders are closely monitoring economic indicators from China, the second-largest consumer of crude globally. Recent inflation data pointed to persistent weakness in domestic demand conditions.
China’s Consumer Price Index (CPI) rose just 0.2 percent year-on-year in January, undershooting market expectations. At the same time, the Producer Price Index (PPI) contracted by 1.4 percent, extending an ongoing deflationary trend in the manufacturing sector.
The subdued inflation environment suggests restrained consumer spending and industrial activity, reinforcing expectations of softer fuel consumption growth in Asia’s largest economy. Analysts say the combination of weak CPI growth and persistent producer deflation continues to cloud the medium-term demand outlook for energy markets.
However, some seasonal support may emerge from increased travel activity ahead of China’s Lunar New Year celebrations, traditionally a period of heightened transportation demand. Still, broader economic signals continue to point to sluggish recovery momentum.
Geopolitical developments offered limited counterbalance to the demand-driven weakness. U.S. President Donald Trump stated that his recent meeting with Israeli Prime Minister Benjamin Netanyahu did not produce definitive outcomes but reiterated that diplomatic engagement with Iran remains ongoing.
In comments to Axios earlier in the week, Trump indicated he was considering the deployment of a second aircraft carrier strike group to the Middle East, suggesting preparations for possible military escalation should negotiations with Tehran falter.
U.S. and Iranian representatives met in Oman on February 6, describing the discussions as constructive. Nevertheless, lingering geopolitical tensions have maintained a modest risk premium in oil prices, preventing deeper losses.
For now, traders appear to be prioritizing macroeconomic demand signals over geopolitical risk, leaving crude benchmarks vulnerable to further volatility as fresh economic data emerges from both Washington and Beijing.
