West Texas Intermediate (WTI) oil prices have dropped to their lowest level in four months, trading around $73.10 per barrel during the Asian session on Wednesday. This decline follows the American Petroleum Institute’s (API) Weekly Statistical Bulletin (WSB) report, which revealed a significant increase in crude oil stocks by 4.052 million barrels for the week ending May 31. This surge reverses the previous week’s decline of 6.490 million barrels and contrasts sharply with market expectations of a 1.900 million-barrel draw.
The downward pressure on crude oil prices is attributed to rising global supplies and an uncertain demand outlook. On Sunday, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to extend most of their supply cuts into 2025. However, they permitted voluntary cuts from eight member countries to be gradually unwound starting in October. By December, more than 500,000 barrels per day (bpd) are anticipated to re-enter the market, with a total of 1.8 million bpd expected to return by June 2025.
In geopolitical developments, Osama Hamdan, a Hamas official, stated during a televised press conference on Tuesday that Hamas cannot agree to any deal unless Israel makes a “clear” commitment to a permanent ceasefire and a complete withdrawal from the Gaza Strip. Qatar, which has been mediating talks between Hamas and Israel along with the United States and Egypt, has urged Israel to provide a clear, government-backed position to facilitate reaching a deal. Oil traders will be closely monitoring these developments, as the failure of a peace deal could potentially lead to an increase in crude oil prices.
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