Oil falls as traders watch for increase in US stocks
Prices stay near two-week highs amid optimism after the US and China agree to cut reciprocal tariffs
14 May 2025 - 07:42
byColleen Howe and Jeslyn Lerh
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Singapore — Oil prices retreated on Wednesday as traders eyed a potential jump in US crude inventories, though prices held near two-week highs amid optimism after the US and China agreed to temporarily lower their reciprocal tariffs.
Brent crude futures fell 39c, or 0.6%, to $66.24 a barrel by 4am GMT. US West Texas Intermediate (WTI) crude slipped 36c, or 0.6%, to $63.31. Both benchmarks had climbed more than 2.5% in the previous session.
The two largest economies agreed on Monday to pause their trade war for at least 90 days, with the US cutting tariffs to 30% from 145% and China slashing duties on US imports to 10% from 125%.
“The US-China economic pause might have crafted a narrative that could invigorate demand amid a backdrop of cautious optimism,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
However, the expectation of a staggering jump in US oil inventories capped optimism for now, Sachdeva said.
“This sharp contrast to last week’s substantial draw signals that the demand side is still grappling with significant challenges, leaving market watchers on edge and wondering where the next twist will come from,” she said.
Crude stocks were up by 4.3-million barrels in the week to May 9, market sources said, citing American Petroleum Institute figures on Tuesday.
Official weekly inventory data from the US Energy Information Administration is due on Wednesday at 2.30pm GMT.
Investors remain watchful of demand signals. Rystad energy analysts said in a note the agreement had “eroded some demand side pessimism”, while cautioning against any lingering effect of the tariffs despite the rollbacks.
The market is also watching US President Donald Trump’s Gulf trip, begun on Tuesday with an appearance at an investment forum in Riyadh, where he said the US would lift long-standing sanctions on Syria and secured a $600bn pledge of Saudi investment.
Rystad Energy’s global head of commodity markets, Mukesh Sahdev, said preventing oil price spikes over the summer travel season would be a key part of the president’s agenda on the trip.
The US could take advantage of lower prices to buy more Middle East crude for its Strategic Petroleum Reserve, he said.
“The big unknown for the market is how US actions related to Iran, Russia and Venezuela will result in supply disruptions or additions,” Sahdev said.
On Tuesday, the US slapped fresh sanctions on about 20 companies it said were helping Iran’s Armed Forces General Staff and its front company, Sepehr Energy, send Iranian oil to China.
The sanctions follow a fourth round of US-Iran talks in Oman to tackle disputes over Iran’s nuclear programme.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil falls as traders watch for increase in US stocks
Prices stay near two-week highs amid optimism after the US and China agree to cut reciprocal tariffs
Singapore — Oil prices retreated on Wednesday as traders eyed a potential jump in US crude inventories, though prices held near two-week highs amid optimism after the US and China agreed to temporarily lower their reciprocal tariffs.
Brent crude futures fell 39c, or 0.6%, to $66.24 a barrel by 4am GMT. US West Texas Intermediate (WTI) crude slipped 36c, or 0.6%, to $63.31. Both benchmarks had climbed more than 2.5% in the previous session.
The two largest economies agreed on Monday to pause their trade war for at least 90 days, with the US cutting tariffs to 30% from 145% and China slashing duties on US imports to 10% from 125%.
“The US-China economic pause might have crafted a narrative that could invigorate demand amid a backdrop of cautious optimism,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
However, the expectation of a staggering jump in US oil inventories capped optimism for now, Sachdeva said.
“This sharp contrast to last week’s substantial draw signals that the demand side is still grappling with significant challenges, leaving market watchers on edge and wondering where the next twist will come from,” she said.
Crude stocks were up by 4.3-million barrels in the week to May 9, market sources said, citing American Petroleum Institute figures on Tuesday.
Official weekly inventory data from the US Energy Information Administration is due on Wednesday at 2.30pm GMT.
Investors remain watchful of demand signals. Rystad energy analysts said in a note the agreement had “eroded some demand side pessimism”, while cautioning against any lingering effect of the tariffs despite the rollbacks.
The market is also watching US President Donald Trump’s Gulf trip, begun on Tuesday with an appearance at an investment forum in Riyadh, where he said the US would lift long-standing sanctions on Syria and secured a $600bn pledge of Saudi investment.
Rystad Energy’s global head of commodity markets, Mukesh Sahdev, said preventing oil price spikes over the summer travel season would be a key part of the president’s agenda on the trip.
The US could take advantage of lower prices to buy more Middle East crude for its Strategic Petroleum Reserve, he said.
“The big unknown for the market is how US actions related to Iran, Russia and Venezuela will result in supply disruptions or additions,” Sahdev said.
On Tuesday, the US slapped fresh sanctions on about 20 companies it said were helping Iran’s Armed Forces General Staff and its front company, Sepehr Energy, send Iranian oil to China.
The sanctions follow a fourth round of US-Iran talks in Oman to tackle disputes over Iran’s nuclear programme.
Reuters
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