Global oil markets saw renewed volatility on Wednesday, with crude prices edging lower amid rising investor unease over US economic signals, including trade policy uncertainty, inflation risks, and softening energy demand from the world’s top oil consumer.
International benchmark Brent crude slipped by 0.1% to settle at $66.99 per barrel, retreating from $67.09 at the previous session’s close. In parallel, the US West Texas Intermediate (WTI) crude price dipped approximately 0.2%, ending the day at $64.78 per barrel compared to $64.94 earlier.
The price retreat came as US President Donald Trump reaffirmed his administration’s intent to proceed with tariffs initially set for July 9. “No, I’m not thinking about the pause. I’ll be writing letters to a lot of countries,” Trump asserted on Tuesday, sending ripples through global markets wary of Washington’s hardline trade tactics.
Trump’s tariff rollout, which began with a base rate of 10% on April 2—labeled “Liberation Day” by the administration—has already disrupted global trade dynamics. Though a temporary 90-day exemption followed on April 9, excluding China, analysts warn that this policy stance could hamper economic momentum and depress energy consumption in the near term.
Additional pressure mounted as US Federal Reserve Chair Jerome Powell spoke at the European Central Bank’s forum in Portugal. Powell hinted that without Trump’s aggressive trade policies, the Fed might have eased interest rates. “In effect, we went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the US went up materially as a consequence,” he remarked.
Although inflation remains within expected bounds when tariffs are excluded, Powell cautioned that elevated inflation readings may continue through the summer months. The Fed’s current interest rate range stands at 4.25% to 4.5%, a level that tends to dampen appetite for riskier assets like crude oil.
Adding to bearish sentiment, the American Petroleum Institute (API) disclosed a surprise increase in US oil inventories—reporting a 680,000-barrel build last week, in contrast to expectations of a 2.26 million-barrel draw. This unexpected rise points to weaker demand conditions in the US energy market.
Traders are now closely watching for the official inventory figures from the US Energy Information Administration (EIA), due later today. A confirmed inventory build could deepen the prevailing bearish outlook, while a significant drawdown might provide some upside support for prices.
