Oil prices declined for the second consecutive day as concerns over global economic growth and rising U.S. crude stockpiles weighed on the market. Brent crude futures dropped 0.3% to $70.35 per barrel, while West Texas Intermediate (WTI) fell 0.33% to $66.53.
The decline followed Russia’s agreement to halt attacks on Ukraine’s energy infrastructure for 30 days, a proposal pushed by U.S. President Donald Trump. While this move could ease tensions and potentially lead to an increase in Russian oil exports, analysts noted that any significant impact on global supply would take time. Market sentiment was also affected by ongoing tariff disputes involving the U.S., Canada, Mexico, and China, which have raised fears of an economic slowdown and weaker oil demand.
Adding further pressure, the American Petroleum Institute reported a 4.6 million-barrel rise in U.S. crude inventories, signaling weaker consumption. However, gasoline and distillate stocks declined, providing some support. Official government data was expected later in the day.
Geopolitical risks remained in focus. Trump reiterated his stance against Yemen’s Houthis, holding Iran accountable for their Red Sea attacks. Meanwhile, Israeli airstrikes in Gaza killed at least 200 people, ending a week-long ceasefire and raising concerns over potential disruptions to oil supply from the region.
Despite tensions in the Middle East, traders remained cautious about price stability, with Goldman Sachs analysts warning that high spare capacity and trade frictions could keep prices under pressure. Additionally, investors awaited the Federal Reserve’s interest rate decision, which could influence economic activity and energy demand. While rate cuts typically boost demand, the Fed was expected to hold rates steady at 4.25%-4.50% amid economic uncertainty.