WTI falls under $66.00 as rising US crude inventories heighten worries about excess supply

WTI Oil Price Drops Amid Inventory Surge

West Texas Intermediate (WTI) crude oil extended its decline for a second straight session, hovering near $65.90 per barrel during Wednesday's European trading hours. The downward movement followed a significant increase in US crude stockpiles, intensifying worries about an oversupplied market as investors awaited the latest Energy Information Administration (EIA) data expected later in the day.

According to the American Petroleum Institute (API), US crude oil inventories jumped by 11.4 million barrels for the week ending February 20, a sharp contrast to the previous week's drawdown of 0.609 million barrels.

Despite the recent losses, oil prices may find some support as market participants weigh potential supply threats ahead of a third round of nuclear negotiations between the United States and Iran. During his State of the Union address, President Donald Trump emphasized his commitment to diplomacy but also accused Iran of advancing its nuclear ambitions and developing missiles capable of reaching the US.

Iran’s deputy foreign minister responded by stating that Tehran is prepared to take all necessary steps to reach an agreement with Washington. The global oil market remains focused on the Strait of Hormuz—a strategic passageway responsible for about 20% of the world’s oil shipments—where any rise in tensions could threaten supply stability.

Additionally, traders are monitoring the possible effects of new US trade policies on oil demand, following the implementation of a 10% worldwide tariff by President Trump on Tuesday, with discussions ongoing to potentially increase the rate to 15%.