Crude oil prices dropped today, reversing gains from earlier this week, after two key developments signaled weaker demand. A surprise rise in U.S. fuel inventories and Saudi Arabia’s deeper oil price cuts for Asian buyers both pressured the market.
Brent crude was trading at $64.76 per barrel and West Texas Intermediate at $62.59, both down from Wednesday’s close. The decline followed news that Saudi Arabia had lowered its official selling prices for July deliveries to Asia for the second consecutive month—bringing prices to their lowest in nearly four years.
At the same time, the American Petroleum Institute (API) reported a significant increase in U.S. gasoline stocks. Inventories rose by 4.7 million barrels last week, while middle distillates saw a smaller build of 760,000 barrels.
Although crude oil inventories fell by 4.2 million barrels, traders focused more on the increase in fuel stocks, which hinted at softening demand ahead of the peak U.S. summer driving season.
Saudi Arabia’s price cut was more modest than some analysts had expected, mainly due to strong domestic demand. During the summer months, the kingdom burns more crude oil for electricity as air conditioning use surges.
“A smaller reduction was likely due to strong domestic crude burn in Saudi Arabia and refinery runs that could limit barrels available for export,” an analyst from Energy Aspects told Reuters.
Adding to the downward pressure, OPEC+ recently confirmed it would increase production by another 411,000 barrels per day in July. Although the announcement was made earlier, its effect on prices was delayed due to renewed geopolitical concerns over the Russia-Ukraine conflict.
Oil prices have fallen roughly 12% since the start of 2025, as traders remain wary of a potential global supply glut. While forecasts of an oversupplied market have yet to fully materialize, market participants continue to trade as if one is inevitable.
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