Oil prices edged lower today (Thursday) as an unexpected increase in U.S. crude and fuel inventories sparked renewed concerns about demand, while investor sentiment remained cautious due to mixed signals surrounding U.S.-Iran relations.
Brent crude futures fell by 33 cents, or 0.5%, to $64.58 per barrel as of 00:38 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude slipped 32 cents, or 0.5%, to $61.25. Both benchmarks had already lost 0.7% in the previous session.
According to the U.S. Energy Information Administration (EIA), crude oil inventories rose by 1.3 million barrels to reach 443.2 million barrels in the week ending May 16 — surprising analysts who had expected a decline of 1.3 million barrels.
The increase was attributed to a surge in crude imports, which hit a six-week high, and a decline in gasoline and distillate consumption.
“Although rising U.S. inventories are a concern, some investors remain optimistic that the upcoming summer driving season — starting after the Memorial Day holiday — could ease the surplus,” said Hiroyuki Kikukawa, Chief Market Strategist at Nissan Securities Investment.
Kikukawa added that market participants are currently avoiding large positions due to uncertainties surrounding the U.S.-Iran nuclear negotiations and a recent media report suggesting that Israel may be preparing to strike Iranian nuclear facilities. He projected WTI crude would remain range-bound between $55 and $65 in the near term.
Further complicating market sentiment, Omani Foreign Minister announced on Wednesday that a fifth round of U.S.-Iran nuclear talks is scheduled for May 23 in Rome.
