Oil prices extended their gains on Wednesday after the U.S. revised its forecast for global oil oversupply, echoing similar adjustments by other market observers, including the International Energy Agency. Brent crude edged closer to $70 per barrel, while West Texas Intermediate (WTI) remained below $67. The Energy Information Administration (EIA) revised its surplus prediction for 2023 downward and halved its outlook for a glut in 2026, attributing the changes to anticipated reductions in oil flows from Iran and Venezuela.
Despite earlier losses, crude prices rebounded on Tuesday, even as U.S. President Donald Trump’s latest trade measures threatened to prolong a downturn in global risk assets. Oil futures have been under pressure since mid-January, following a chaotic tariff rollout, OPEC+ plans to increase oil supply, and weakening demand from China.
“Overall sentiment remains fragile despite a slight bounce in today’s session,” said Yeap Jun Rong, a market strategist with IG Asia Pte. “The lack of clarity surrounding tariff developments and ongoing concerns about U.S. economic growth continue to weigh on the market.”
Meanwhile, the American Petroleum Institute (API), an industry-funded body, reported a 4.2-million-barrel increase in U.S. commercial inventories last week. However, there was a notable drawdown at the key storage hub in Cushing, Oklahoma. If confirmed by official data on Wednesday, this would mark the first reduction at Cushing in five weeks, a key development for WTI futures.
Geopolitical tensions also remained in focus, with Ukraine agreeing to a U.S.-proposed 30-day truce with Russia, offering a potential pause in the ongoing three-year conflict. At the same time, the Iran-backed Houthis in Yemen announced plans to resume attacks on Israeli ships, marking the first such offensive in two months.
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