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Oil prices slipped on Wednesday following the release of data indicating a larger-than-expected increase in US crude inventories despite a rebound in refining activity. Nonetheless, futures remain approximately 2% higher for the week, largely fuelled by ongoing concerns over instability in the Middle East.

Brent crude fell by $1.08 or 1.42% to close at $74.96/barrel. 

WTI decreased by $0.97 or 1.35% to settle at $70.77/barrel.

The US Energy Information Administration (EIA) reported an increase in crude inventories of 5.5 million barrels last week, attributed to rising domestic production and robust imports. Additionally, a strengthening US dollar has exerted downward pressure on oil prices, making dollar-denominated crude more expensive for buyers using other currencies.

Despite these bearish indicators, persistent worries about potential supply disruptions in the Middle East—fueled by stalled ceasefire negotiations—continue to provide a floor for oil prices.

Written by: Muhammad Hafiz